Closing Bell - Closing Bell Overtime: Markets Track Oil Moves, Nvidia’s AI Moment and New Questions Around the Fed 3/16/16

Episode Date: March 16, 2026

Dan Skelly of Morgan Stanley Wealth Management joins on set to assess the market setup and what investors should watch next. In tech Nvidia takes center stage as CEO Jensen Huang delivers a major keynote. Patrick Moorhead of Moor Insights and Dylan Patel of SemiAnalysis analyze the announcements and discuss what they mean for AI infrastructure, memory demand and the semiconductor ecosystem. Mark Mahaney of Evercore explains why there investors are looking for signals for spending discipline across big tech. Finally Steve Liesman breaks down a key question in Washington: whether the Federal Reserve Board could vote Jerome Powell back into the chair role if Kevin Warsh is not confirmed in time. 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. Citizens Financial ringing the bell and at the Nazak. It's the St. Patrick's Day parade. Welcome to closing bell overtime. We're laughing studio be at the NASAC market site. I'm Melissa Lee, along with Mike Santoli. Sox broadly hired to start the week trying to snap a three-week losing streak. Oil providing some relief.

We got more on the market straight ahead. On our radar at the close, the big Nvidia event, Jensen Wong wrapping up his keynote address at the GTC, plus the next product that we need and that is potentially effective. by the blockage of the Strait of Hormuz. And we'll look at what might happen as the standoff over the next Fed chair drags on. 1% game, Melissa, in the S&P 500. You call it like a respectable but not necessarily decisive little bounce.

Exactly. Just the down drafts that we've seen, not really respectable either in terms of it's not any sort of capitulation. Same thing to the upside. Not a lot of conviction there. High volume stampede type resolution. You definitely say the market took the opportunity to say, okay, we closed it a year to date low. The S&P was just above its 200-day moving average, starting to look oversold.

You obviously got oil price come in 4 or 5 percent, and that cleared the way higher. And it was NASDAQ-led, so it was a little bit like, let's go to the old leaders, the old favorites. Didn't quite get us to Friday as high even on the S&P 500 at the highs of today. So you wait to play another day. Volumes were pretty light. And you sort of also, I'm looking at things like bank stocks underperform. They didn't really have an emphatic. back and even consumer cyclical. So, you know, we'll kind of take the lift, but don't necessarily

assume things are settled. The old tech plays. I mean, Micron led the way all the memory stocks. Sure. They wanted to go to the old playbook once again. Yeah. So we'll see how it goes to on some level. It does make sense. We always end up in these situations in pullback mode when the market's like, wow, look how resilient, look how resilient, but then it takes on wear and tear and everyone says, but there hasn't been a flush. We need to have more aggressive downside to really solve things. So we'll see if we actually are going to need something. that. Well, we're going to turn to the event of the day. InVIDIA holding its GTC

event today with CEO Jensen Wong wrapping up his keynote just a few minutes ago. Christina Partinevarez is there and joins us with the headlines and there were some eye-catching ones, Christine. Obviously very complicated Yeah, and I'd just like to point out that Jensen's still speaking right now because he started a little late, but he gave

investors what they came for. At least $1 trillion in cumulative revenue through 2027. That's what he's promising of Blackwell and Rubin. Those are different GPU architectures. Shares actually jumped as much as 4% before giving back those gains, falling back below 2%. That number, $1 trillion, is pretty much double the previous $500 billion figure that they just extended for an additional year. So perhaps the market is just treating that as, you already said it was

going to go higher. It's only $500 billion higher. Maybe that's why shares sold off. In other news, he also unveiled the GROC 3, Nvidia's first chip built on technology. It licensed from GROC for roughly $20 billion just last year. This is designed to sit alongside in Vyraq's just and make AI faster at generating responses in real time, in other words, the inference stage. The chip is expected to ship in the second half of this year around the third quarters, according to Jensen Wong, the CEO. On networking, Jensen's sending a clear message to the supply chain, copper isn't going away, but optical, and that's the use of light, is scaling up through the system and out with other

data centers. And so the bottom line, in video, according to Jens Duong, is that he just needs more of everything within the infrastructure. The CEO also had an admission that really caught some attention. He said, quote, we never thought we would be selling CPUs, the central processing unit, stand alone. This is already going to be a multi-billion dollar business for us. CPUs are essentially the brains of a computer, the chip that manages and coordinates or some of them, say, orchestrates everything else. Mbrius' Vera's CPU is built on arms architecture, already being picked up by META, Alibaba, an Oracle, So that's why you saw arm shares climb about 5%.

As in video, CPU push really puts a direct spotlight on its chip design, guys. And so far, we're still on stage. Yeah, I want to underscore, though, Christina, the forecast that he gave, given the pot that we saw and then the pullback, $500 billion was a baseline through 2026 already for Rubin and Blackwell. So he's basically saying that there's going to be $500 billion the next year. We're analysts not assuming that there would be any growth year on year because that implies no growth year on year? precisely why you saw the initial reaction and why I wanted our audience to know that that $500 billion extra, yes, it's a doubling of the number, but it's not a substantial amount of growth.

It's a great number, $1 trillion. But after that GTCDC back in October, you had the CFO of Nvidia already say that that number needs to be higher. You had Jensen Wong, the CEO, say that that numbers needs to be higher. So the market already knew the number was going to be higher, and the fact that it was just an additional $500 billion maybe is tempering expectations and had everybody kind of sell off shares after they realized that it wasn't as big of a growth to your point, Melissa. Yeah, and I guess we're talking orders on some level and it's not necessarily translatable,

dollar for dollar, into revenue. I thought also the initial $500 billion maybe covered five quarters. I mean, clearly he likes to speak in broad, big picture terms and accentuate that demand is still going to be extremely strong for as far as he can see. see, but it's pretty tough to knit it back to, you know, everybody's revenue and earnings model right now. Well, Mike, I'm smiling because then I could just challenge you and say that almost every major CEO of a tech company uses their backlog orders as big numbers that they throw on earnings call

or RPO's or whatever, you know, acronym you want to use for it. And so we can always question whether that actually translates into revenue dollars. In this case, he alluded to the $1 trillion being even, could be even higher and that they have the demand, but yeah, there's a great point that we don't know if any of this always translates into actual, you know, money on the income statement. Christina, thanks. Christina Barton Nevelas, you can hear Jensen Huang still speaking. Absolutely.

As we mentioned, stocks ending the day in the green, but off the highs with tech leading. Seema Modi joins us now with some of today's biggest mover, Sima. Well, Melissa, on VDivias conference driving the news, sending shares of Oracle, IBM, Pallonter hire on the day. We saw Nvidia competitor, advanced microdevices close up by 1.6%. on this idea that we're going to see more spend on AI chips. Elsewhere among the Mag 7, META shares closing higher by 2% on this Reuters report that the company is planning to lay off

as much as 20% of its workforce. Now, a meta spokesperson telling CNBC it is speculative report about theoretical approaches, but nonetheless, shares did end higher separately. That announcement that meta has signed a five-year agreement with cloud computing company Nebius to spend up to $27 billion on AI infrastructure. That's that Nebius shares up by 14%. And then even if we broaden it out and look at other semiconductor memory names like Micron, continuing its big rally that we're seeing

this year on these continued concerns around a memory shortage. Now outside of tech, oil's big drop sending energy stocks to an all-time high, meanwhile fertilizer stocks reversing after soaring for several days. Today's plunge comes after Secretary Besson confirming with CNBC that certain oil tankers have been able to travel through the strait of Hormuz, a hopeful sign given that a third of globally traded fertilizer travels through that key passageway. The fall in oil prices pushing some consumer stocks higher on the day. We saw the cruise lines that are negatively impacted, of course, by higher oil prices trade up by around 2 to 3 percent. Hotel stocks like Marriott, up 2.5 percent, and even some of the low-cost, quick service names like Chipotle and McDonald's

getting a bid in today's trade. Mike? Stephen, thank you. Well, as we mentioned, relief in oil prices was a piece of the puzzle for stock market gains today. Let's get to Pippa Stevens for more on oil's moves. So Pippa, the market perceiving that oil is a little bit less tight supply demand-wise than we thought? That's right, Mike. So some ships are now transiting through the Strait of Hormuz, and the oil market seems to be taking that as indication that we could be moving towards some normalization in flows, although it is very early days here. Now, we're also seeing record loadings from Yanbu in Saudi Arabia that is in the Red Sea, and so bypasses the Strait of Hormuz. And as you see from the Oud, that is not the right map. But we are seeing that there are a record number of ships now loading at tankers at Yonbu,

with many more heading in that direction. But the Bab al-Mandab Strait, which is south of the Red Sea, remains another oil choke point. And Houthis have previously targeted ships there. And so there are still a lot of questions about that infrastructure as well. Now, U.S. diesel is a penny away from $5, with Kepler estimating that Asian refinery runs are now down 15% month over month and won't recover until the end of Q2 at the very earliest. And while we are seeing some unwinding of upside tail calls, the implied probability of Brent for July delivery expiring above $100 has grown to 15%. That's up from essentially zero at the beginning of February, according to Goldman Sachs, meaning there is still a lot of concern in the oil market.

Guys? PIPA, thanks, PIPA Stevens. President Trump speaking today at a lunch at the Kennedy Center. Let's get to Amon Javers for some of the highlights there. Amen. Yeah, Melissa, that's right. This one was at the White House, but it was about the Kennedy Center. This was an event to talk about the renovations and the decorations at the Kennedy Center.

The President also talked about the war progress so far. He said the United States military is continuing to strike targets throughout Iran that he's pleased with the technical process of the U.S. military, but he said there was one aspect of this war so far that has surprised him. Here's what he said. They weren't supposed to go after all these other countries in the Middle East. Those missiles were set to go after them. So they hit Qatar, Saudi Arabia, UAE, Bahrain, Kuwait. Nobody expected that. We were shocked. So the president there saying that he was shocked by the Iranian retaliation against other Arab nations in the region. One of the things the president said he was not shocked by,

though, was the closure of the Strait of Hormuz. He says he's known that was a linchpin to the region for many years. He said the United States will work on reopening the Strait of Hormuz. And though he said that the United States is the most powerful military in the world and doesn't need any help, he's been disappointed by rebuffs that he's gotten from countries around the world to his request for naval assets to help in the reopening of the Strait of Hormuz, guys. Amen, thank you. Well, let's turn to the markets.

Our next guest says stocks can still finish the year higher on solid earnings and a resilient U.S. economy, and investors may be overpricing AI disruption and private credit panic, creating opportunities in both areas. Joining us now is Daniel Skelly, head of market research and strategy at Morgan Stanley Wealth Management. Dan, good to see you. Thank you for having me. We are just with the S&P 500 in a 5.

percent pullback, right? If you didn't know what was happening in the world, you'd say, okay, that's not too unusual. We're also within this four-week window, which I guess we all should remind ourselves was maybe what the White House said. This might last this initial phase. So presumably, you haven't taken this as an opportunity to really revise what you think's happening in the economy or the markets at all? Not really, but the longer it goes on, obviously, the more disruption it'll cause. I think what it's created, though, underneath the surface is massive opportunity for bottom-up stock picking. And so what we're trying to do at the moment, frankly, is not make a big call one way or another on the index because, frankly, there is so much uncertainty, but rather use the rotation that we've seen thus far to take some lower quality cyclicals, commodities off the table, take what the market's given us, and actually go back to some of the growth year and, frankly, some of the names that were perceived as AI disrupted from a few months ago.

So obviously that would be the software-type names and other sort of data services, information economy stocks. I mean, have you been busy picking those up off the lows? Absolutely. So software, but not all software. We do contend that there's going to be a spectrum of winners and losers there. So selectively within software, no doubt. Secondly, yes, data-centric type business models across different industries, healthcare being a good example.

And then lastly, also just thinking about financials. I mean, financials, frankly, had been selling off prior to Iranian conflict for some time. And we're thinking that the economy is not going to take this as a huge shock. There's actually probably some opportunities in large-cap banks. At what point, though, do you start to think that this, what President Trump calls a short-term excursion, becomes a longer-term excursion actually has an impact? I mean, are you going to wait for the next quarterly reporting season to see what the companies say about it, to see it show up in the results?

Or at what point do you say, you know what, it's a little different now? So it's a fabulous question. And I think if we just track gas prices and use the 2022 Ukraine analog as a baseline, we had $5 gas prices back then. And we also hadn't seen the full evolution of what we've all called the case-shaped economy. So on the one hand, we're tracking towards $4. That's starting to probably hurt everyone. So the further up you go towards five is an issue. But on the other hand, just to be frank, let's step back for a minute and recognize that 10% of the population in the U.S.

is driving 40 to 50% of all spending. and they tend to be less sensitive to energy and food prices. And so I'm not necessarily sure the longer this persists, it's going to break the case-shaped dominance and phenomena that's been going on. You mentioned financials have been underperforming and maybe you think they're getting cheaper. There's no doubt those valuations have come down. But how do you try to get the confidence that they're not trying to tell us something about some erosion in parts of the credit complex?

Well, that's a fabulous question. You have to look underlying towards the credit exposures, which clearly we have in the headlines at the moment private credit concerns. Our team on the credit side has argued that's largely idiosyncratic and not systemic. I've joked there's no bigger atiosyncratic risk than fraud, and we've seen instances of fraud in that space. Clearly, we think software, per my earlier comments, is not a dying industry, so we think that risk is overdone.

But I think, frankly, you've got to think back to the setup we had prior to Iran. Steeper yield curve, which is now flattened, admittedly, we think that resumes steepening. secondly, a healthy consumer overall with fiscal tax refund support coming through. That helps offset some of the commodity gas price pressure and a capital market cycle, right? And so we've heard Morgan Stanley is a great vantage on this. We've heard of a tremendous pipeline, and we've heard no change from that. Dan, thanks so much for coming by. Thank you. Dan Skeli.

Oregon Stanley wealth management. We've got a news alert here. According to the Wall Street Journal, the SEC is preparing a proposal to eliminate the quarterly earnings report requirements and give companies the options to share results just twice a year. The rule would make quarterly reporting an option, not eliminated altogether. This proposal gained steam last year with both the president and the SEC chairman supporting the idea. Change could be met with opposition from investors who use quarterly results for investment decisions. It will be interesting might to see what kind of uptake this is.

It will, absolutely. It's an opportunity for companies just sort of not managed to each quarter and to have a longer-term view on things. I think it might essentially follow the line of companies that give guidance and don't give guidance, right? Nobody has to give guidance. But yet a certain large percentage of companies feel it's useful to do that. The information exists. You'd rather have the company's expectations out there. Also, we should keep in mind that the IR function of these companies is also to kind of promote.

You know, and so you have the earnings report, you have the shareholder letter. You have all of these things around an earnings report that are basically able to have the company give its... side of the story. And they may want to embrace it. Now, I guarantee there's going to be some companies that will take this and say, great, we're going to focus on the long term and not every three months. Yeah. Remember when retailers used to all across the board report monthly comments? And then many of them stepped away from it. And there was sort of like, why aren't you doing it? Maybe it's a bad sign. You're not giving us monthly readings. Right. And then people got used to it. Oh, yeah. It just went away. There's no doubt people get used to everything.

But yeah, it'll be a fun experiment. Well, InVedia hosting its big AI conference and Jensen Huang just wrapped up the keynote. Up next our panel weighs in on what we heard and whether can get this stock back on track. You're watching closing bell overtime live from the NASDAQ market site. Welcome back. As stocks rebounded to start the week, some hot areas once again leading the way, check out the memory names, big gains for Micron, Sandisk, Western Digital, and Seagate. That, of course, adds to the huge run these stocks have had over the past 12 months. Let's focus on Micron. That stock getting three price target upgrades just today, Baird and TD Cowan hiking to $500 a share, RBC going to 525, and today the company announcing a plan to build a second memory chip site in Taiwan.

Micron reports results on Wednesday. Of course, you'll be able to see that right here on overtime. Sticking with tech and Vedia getting a pop, but quickly losing those gains after CEO Jensen Huang said at the company's developers conference that he expects purchase orders of $1 trillion through 2027 for the Blackwell and Vera Rubin Systems. The stock has essentially been flat in the past six months up just 5%. So will this event help give it some juice? Joining us now is Patrick Moorhead, more insights and strategies. Patrick Moorhead, along with Dylan Patel,

founder, CEO, and chief analyst at Research Term Semi Analysis. Both are in San Jose. Just came from Huang's keynote. Guys, great to see you both. Thanks for joining us. I want to get your take. Dylan, I'll start off with you on that $1 trillion forecast, which at first blush seems enormous,

but then when you back away and think that the forecast through 2026 was $500 billion, doesn't seem that impressive. I'm going to give them probably... Dylan. You have to look at the people who didn't believe Jensen when he cranked out the $500 billion

number. And now we're here we're questioning the $1 trillion number. I think you are either a glass-saf full person about AI or kind of neutral on it. There's not a lot of glass-sapped empty folks. But in the end,

the amount of tokens that are going to be required across consumers, across the enterprise, across startups. I think the $1 trillion number is pretty safe. I think we need to keep an eye on the amount of power generation that's going to be required in around the 2028 time frame. Dylan, what's your take on the forecast? Yeah, the big thing that Jensen laid out here today is that it's not just the five major hyperscalers that are deploying AI across the world. It's actually this whole ecosystem of hundreds of companies. The real thing that he's doing here is laying the foundations

for regular enterprises, startups, and sovereign AI companies across the world to deploy AI into every application. And that's been the real big challenges for a lot of investors is, hey, okay, the five hyperscalers, they're turning on the money spigot. Are they gonna turn it off?

What are they gonna turn it off? Now the question has shifted to, wow, there's all of these different companies that are actually spending money and there's real ROI. You're starting to see it with Anthropics revenue, adding $6, $7 billion of ARR a month, but there are so many more firms coming online with revenue streaming in, and they've announced these coalitions and all these different pieces of software

that help NVIDIA's customer base get widened. Patrick, part of the job for Jensen Wong at this meeting has been, presumably, to persuade investors and people in the industry that it can dominate this next phase and answer the challenge to a lot of these sort of non-jerkensual. GPU-related solutions and the other custom chips. So is he on his way to doing that? What more do we have to hear? So I put out a note right before the show, and I said Jensen needs to make the case

for heterogeneous computing across the different chips that he has to offer with one contiguous software that goes across it to decrease the amount of work it takes to use all of these two chips because if you are using them standalone, it could be a big issue. And I do think he delivered today and whether you're looking at training, whether you look at the disaggregation of inference, he talked about how he integrated GROC. He talked about a piece of software called Dynamo inference that goes across all of these different silicon GPUs and LPUs and CPUs. So I thought it was a good message and I don't see them losing traction here. That's for certain. Are they going to be gaining traction? I mean, Dylan, there's so many competitors out there when it comes to this next phase of

compute power inferencing competitors who are developing their own chips, Amazon with cerebris. I mean, there are a multitude of quote unquote competitors where the hyperscalers could be spending their money and not necessarily on a groc plus Vera Rubin chip. So there's a really important thing that Jensen is doing and it's attacking them from two ways. One is by developing all these different chips, right? The GROC acquisition, creating a few different chip architectures of his own. The other one is to actually lock up capacity in the entire market, right? The Nvidia has locked up over 60% of the capacity this year in long-term contracts alone,

and they're buying more on top of that. And as you look at what they're negotiating in the market today, there's over $250 billion of wafers, of memory, of substrates, of PCBs, of networking equipment, that they're going to sign this year, which is going to prevent most of these startups from getting any reasonable amount of supply. Great, you can make a good chip,

even if their chip is better than Invidia, which is a really tough problem. If they do have a better chip than Nvidia, great, I can buy $10,000, I can't buy $100,000. I can't buy millions, tens of millions, which is what Jensen's setting his supply chain up for, right, to manufacture tens of millions of AI chips and connecting through all the way from, you know, the silicon

where TSM and all these other players, the memory vendors, sit all the way upstream to, hey, all the cloud companies. I'm working with you, and I have the data centers picked out for where these GPs are going to land next year. And then all the way to the end customers with all these different labs, AI-native companies, et cetera, right? It's getting the entire supply chain there. If someone has a better chip,

which is a tough challenge with how many different chips and videos making and all the innovation they're doing. But even if they do, can they even get supply? So it's a two way of attacking them. Yeah, I guess pressing the advantage of scale and incumbency there. We'll see how that shakes out. And we'll see how the market digest this too. The stock ended up 3% off its highs at the end of the day.

So the meeting continues. Patrick Moorhead, Dylan Patel. Thank you very much for the time. Thank you. Mr. Jim Kramer's interview with NVIDIA CEO Jensen Wong, and that is tomorrow at 10 a.m. Eastern on Squawk on the Street. And I'll have more on Mad Money tomorrow night at 6 p.m. coming up, one silver lining of the recent market pullback, valuations getting hit. So did that take one potential problem for the market off the table? Over time, we'll be right back. Welcome back. Take a look at some of the stocks hitting 52-week highs today.

Several in the utility sector, including Duke, Con Edison, Centerpoint, and Alliance. Now take a look at the forward PE ratios for those names, all right around 20. We added one name at the bottom. Invidia. That fits right in, interestingly enough. And Mike, you've been taking a look at valuations for the overall market. We've been saying that the market has pulled back. Not too much.

Valuations have pulled back. They actually have. So the combination of kind of sideways index action for six months, the passage of time and rising earnings have moderated the forward PEs of both the NASDAQ 100 and the S&P 500. And it's brought them down essentially to the lower end of the. the ranges they've been in since this bull market started three plus years ago. That would mean just over 20, around 21 for the S&P 500. Now, obviously, this is the tariff panic last April. It's a clear downside overshoot. We were pricing in something close to a recession. So arguably, the sort of functional floor has been more like 24 for NDX, 20 for the S&P. Nothing says you can't

get below that. Obviously, it's also dependent on those earnings coming through. And the estimate's not being cut now that we have to contend with the friction of higher oil prices. But at least it's one thing that is less extreme than it was, along with investor sentiment, has also moderated along the way. It's interesting that the 20 level, though, has really been. It has bounced off there. It's kind of fascinated. Now, if you go back farther in history, obviously, 20 was quite high. It was only at the pandemic when we broke through there, and it seemed as if 20 was a sustainable floor. Time now for our CNBC News update with Julia Borson. Hi, Julia.

Hi, Melissa. A federal judge this afternoon blocked key parts of health secretary, Robert F. Kennedy's push to change U.S. vaccine policy. The judge sided with the American Academy of Pediatrics, which argued regulators acted unlawfully to carry out the changes, including reducing the number of shots recommended to children. Border Patrol commander Large Gregory Bovino is retiring at the end of this month. He made the announcement today, Bovino, who became one of the most prominent symbols of the administration's immigration crackdown, was removed from command in Minneapolis after the deaths of Renee Good and Alex Preti at the hands of ICE agents. He did not say what he plans to do after retirement. And the BBC filed a motion to dismiss President Trump's $10 billion defamation lawsuit against it. President Trump claims the BBC

edited a January 6th documentary to make it appear as though he encouraged the attack on the Capitol. The BBC argued in its motion that the suit would have a quote, chilling effect on free speech and noted that its documentary did not air in the U.S. Back over to you. Julia, thank you, Julia Borson. Shares of meta getting a boost today, as reports say the company is pondering big job cuts. The stock has gone nowhere over the past year. Could this be what jumpstarts it?

We'll be right back. Welcome back to closing bail overtime live from the NASAC market site. Sox broadly higher today with Dow up nearly 400 points, gains of about 1% for all the major averages. every S&P sector was higher with tech leading the way. Consumer discretionary, communication services, and financials also with gains. And Nebius Group, a big winner. The company is signing a cloud computing deal with META, which could be worth as much as $27 billion. Well, in other meta news, the stock closing higher after Reuters reported,

the company is considering reducing its workforce by 20% or more due to large cost outlays for its AI infrastructure, as well as preparation for productivity gains. While META is saying the reports are speculative, it's the latest example of investors rewarding companies for cutting costs, particularly through layoffs. Joining us now is Mark Mahaney, head of Internet research at Ebercore ISI. He has an outperform rating on META, a $900 price target on the stock. Mark, good to see you. Good to see you, Mike. What are your thoughts, first of all, on the likelihood of this deep a cut to the workforce at META?

Well, I got to say, Mike, I was actually kind of skeptical when I saw the reports, but there are enough reports. enough smoke. I assume there's some fire here. I'd be surprised if it's that high. This is not, this is not a block setup. This company has taken dramatic reductions in this workforce. So the last couple of years, if you want to see efficiencies, you can see them already in METIS financials. They generate more revenue per employee and operating and profit per employee than any of the other hyperscalers. I mean, Amazon, Microsoft, and Google. So look, we've already seen, you know, great, great efficiency movement at the company. I think a lot of other companies tried to copy them. So that's why I was a little surprised by the severity of the reported cuts. 20%

seems a little high, but there are a lot of reports here, so I respect that. And yes, I get the efficiency savings associated with those kind of layoffs. I think the market would want more than that, though, to really take the stock up materially from here. Actually, Matt did this sort of deep job cutting not too long ago, Mark. Didn't they do this sort of round in 2022? I mean, back then it wasn't, you know, in preparation for the productivity gains thanks to AI. And this time it somehow is. I'm just wondering, you know, if you really think that that's what it's about. It's a drop in the bucket when it comes to their total expenses to eliminate 20% of its workforce.

You're right. But, you know, Headcount is a major part of their expense structure. And, you know, the setup is right, which is, you know, three years ago, there was the year of efficiency memo by Zuckerberg. And that helped also the stock. back then was trading it like 12, 13, 14 times earnings. That's not the case now. It's not dislocated in the way it was back then. So that's sort of partly why I don't think that there's going to be a, you know, I get the trade today. I'm not sure that this is what the

market's been waiting for. The market wants to see two things. Show us this superintelligence offering solution product that you've been talking about and investing in and show us this leading frontier edge model. And, you know, that's been delayed a little bit. That's going to be, those are two very hard tasks, in part because there's incredible competitive intensity. You want a really good super intelligence asset? Look at Gemini. I've been very impressed by Gemini personal intelligence. And then look at leading frontier models. I mean, you're, you know, there's three or four or five companies well ahead of meta here. So it's a huge catch-up game. It doesn't mean they can't do it. But I think that's what investors really want to see in order

to materially re-rate meta from here. What sort of time frame are we talking about in terms of when Medica can plausibly demonstrate those things? I don't, I'm not sure, Mike. You know, maybe six months, 12 months or something like that. Look, they did an extraordinarily large number of aqua hires last year. So they put the money in. They've kept most of the people, not all of them, but most of the people that they hired. So, yeah, I would think like a year of year in gestation.

Is that the word that, you know, that you would see some sort of results. So I would imagine, I was sort of hope in the middle of 26, middle of the, middle of 26 to the end of 26 is when we should see something definitive. And the advantage, by the way, that meta has, the wonderful thing that they have is, if they get this right, I mean, they've got this massive platform to roll out improvements on. They've already proven that they can deploy AI to materially improve their business for all stakeholders, including investors. So they can do this if they get the products right.

I just, I want to see that, you know, to get real fire behind the stock. And if they get it right, does that mean a 50% move from here? to get you to your $900 price target? Yes, yeah, you get that right. And this goes back to 25. This could go to 30 times earnings. So, yeah, if you really pull that off, look, I think there really is it there

when it comes to personal intelligence and everybody having an AI assistant. Maybe this is three to five years out, but just the small stuff I've seen out of getting back to Gemini personal intelligence, like these are very powerful and useful tools that I think a lot of people are going to be willing to engage with.

And, you know, if there was one company that knows extremely well how to monetize engagement. It's meta. Mark, great to see you. Thank you. Thank you, Marraini. Well, is there arrogance in the private markets right now? That's what Top Apollo executive is saying. Details straight ahead. And we already know the conflict in Iran is hitting your wallet at the gas pump up next. Find out whether it could also end up having a huge impact on the price you pay for drugs. Overtime. Be right back.

Welcome back to overtime. The private markets have been trying to calm industry fears about money fleeing their funds, but Apollo asset management co-president John Zito is speaking a bit more bluntly. According to audio recordings from a UBS client meeting last month reviewed by the Wall Street Journal, Zito called out companies not properly valuing some of their investments saying, quote, I kind of sense an arrogance of the people who grew up in the private markets business. If you don't mark your book, I think you actually lose trust with the clients. We're going to be a market leader in actually marking our book. Apollo telling the journal, Zeta was specifically referring to software company valuations as part of this discussion.

Other things he mentioned I thought were interesting, which was there's still voracious demand for private equity and private equity stakes, even though everyone's nervous about the debt piece of these same buyouts. Right, but they're so intertwined. Also, I thought what started to me was he said all the marks are going to be bad. Yes. And that was, you know, if all the marks are going to be bad and we're still going to re-evaluate, remark all of the software companies, then there is more pain to come for sure. That blue owl sale was not any sort of a marker in terms of laying this sort of the floor for marks. A lot has gone on. For him to say that, that's, that's, yeah.

And he said for software companies that are kind of not in the right place in the business, the recoveries on the debt could be 20 to 40 cents on the dollar, which is a much lower recovery. So, you know, obviously, I do think it's worth saying Apollo culturally. It's like historically a distressed debt, vulture type investor, very value and credit sensitive. So they're coming from a world where they kind of like to see the carnage or they always anticipate the bad things. But nonetheless, very, very frank talk and a little bit different than what you're hearing. Well, higher oil prices is not the only ripple effect from the closure of the Strait of Hormuz. It could eventually reach us pharmacies, reach U.S. pharmacies.

Nearly half of U.S. generic drugs originate in India, which relies on the Strait of Hormuz for oil shipments, including petroleum-based materials that include some common medication ingredients that are used in drugs like aspirin. parasitamol, and painkillers. And, of course, the risk of supply shortages will depend on how long the disruptions from the war last. Joining us now is Infios, chief supply chain strategist, Steve Blow.

Steve, great to have you with us. Great to be here, Melissa. I think Americans don't really understand or realize that there is such an intricate supply chain, even though many might know that India is a major manufacturer of generic drugs. But basically, you're saying that there are a lot of compounds that actually have to travel to consolidators in the Middle East and then go back to India for the

manufacturing process. Is that correct? Right. So a lot of the drugs are the ingredients for the drugs are manufactured in China. Some go direct to India, but some flow through places like Dubai and Middle East ports to get to India, as well as the petrochemical supplies or ingredients that go into the making of the pharmaceutical as flow through flow out of the Gulf is at the same time so it's getting a compound effect right of the costs of of course the transportation due to the oil hikes are are being impacted on each leg of the journey and then these other delays for the pharmaceuticals to get out of the Gulf are hurting the production in India and then they flow back to the Gulf to be distributed out through

from Dubai and the Emirates and so forth, out through whether it's Africa, Europe, and then ultimately the U.S. And then we're talking about drugs, fairly common drugs, hypertension drugs, diabetes, drugs, some cancer therapies. I'm wondering, though, Steve, how much of these ingredients are stockpiled? How much of the finished drugs are actually stockpiled? So, you know, when will we actually see some of these disruptions hit the supply chain? Yeah, I think, I mean, you know, I don't have a crystal ball, but.

But clearly all these pharmacies and these suppliers have gone to just in time sort of delivery. So you're going to see maybe in a four to six week period that those start to be impacted. Depends, of course, when the Gulf starts to open up again. But nonetheless, I mean, it's definitely going to have an impact on prices in that short term and that short of a term because of the things I discussed before. Steve, as part of the whole trade policy debate around President Trump's tariffs, and one of the storylines is always that we should bring pharmaceutical manufacturing back here to some degree, and it's been presented as a bit of a supply chain risk or national security even concern. Is that plausible that we could actually do larger-scale manufacturing of some of these commodity

pharmaceuticals? Well, I'm sure it's possible. I mean, and, you know, it can happen, but it's not a near-term thing, right? I mean, it's sort of like we saw this in COVID, right, where everybody wanted to start nearshoring because they couldn't get things from the far east, but, you know, you can't just turn around now and have things manufactured instantly in another country. So, yeah, I think longer term, we can start to produce that. But in the short term, you know, what we're seeing is already sort of adaptations to the supply

chain disruption of, you know, there's, like Ethiopia has opened up as a sort of a new lane from places like India and Vietnam, well, that's now becoming sort of the go-to place instead of Dubai, right? So, you know, but those type of disruptions cause increase in prices. And again, with pharmaceuticals, it's interesting because so much of its cold chain. In other words, things have to be kept cold, you know, whether it's in containers. Some people don't realize how basic some of it is. It's dry ice with a fan with a battery on it, you know. So the batteries have to get changed, those type of things.

And, you know, you can't just take those anywhere, right? You have to have the ability to maintain those and manage that coal chain the whole way, because once it gets warm, the supplies are ruined. And also what's happening is the carriers are, you know, putting in procedures now that say they're not responsible if things spoil. So, again, they're getting kind of stuck in the manufacturers getting kind of stuck. And, of course, those prices will be passed on to the conditions. consumers.

Fascinating. Steve Blow, thanks so much for your perspective. Thank you. All right. Up next, a look at what could happen if the confirmation of Fed Chair nominee, Kevin Warsh, is delayed significantly and the potential impact it could have on the market. Closing Bell Overtime, live from the NASDAQ market side. We'll be right back. Welcome back to Overtime. Investors are starting to wonder what could happen if J. Powell's term as Fed Chair expires and Kevin Warsh, President Trump's nominee to replace him, has still not been confirmed by the Senate. Steve Leesman has some potential options, been working through the

scenarios. Hi, Steve. Yeah, good afternoon, Mike. Janine Piro, the U.S. Attorney for Washington vowing to continue the fight against Fed Chair Powell after a judge quashed two subpoenas she sought in a criminal probe of whether Powell lied to Congress in testimony about the Fed's building renovations and cost overruns. Her actions create the potential to delay Kevin Warsh's nomination hearings and for Fed Chair Powell's term to extend after it ends on May 15th. Now, odds on, Calcey put the chance that Warsh is approved by May 15th at 62%. So pretty hefty 38% chance it doesn't happen by then. Pira has already filed a motion to reconsider, also promised to appeal.

Both of these legal actions will take time and even more time if she wins. Meanwhile, Senator Tom Tillis, he's vowed to hold up President Trump's nominee, Kevin Warsh, as chair while the criminal case is pending. The president of social media posts this weekend blasted Powell and the judges, but didn't mention if he thought Peeryl should continue the case. So what happens? Well, most likely outcome this has not really been tested yet would be that the board votes Powell as chair pro tem,

probably also chair of the FOMC. Warsh is going to continue meeting with senators this week ahead of nominations hearings. The question, Tom, Mike, is whether senators will get a chance to vote on that nomination, Mike. For sure. And, you know, it's really interesting the way it has all come together, Steve, in the sense that the market is, taken potential rate cuts out of the forward curve for obvious reasons, right? We have the oil spike and inflationary effects and all the rest of it.

I almost wonder if Kevin Warsh wouldn't mind not be the one to be in there in a tougher spot immediately to have to basically say, look, we have to wait and see on rates at this point. Yeah, so I have this idea of creating a Kalshi odds on how quickly President Trump will criticize Warsh. and if he were to take office in June, it would be, and not cut rates, it would be very fast. So I think you're right that all of this stuff, whatever happens with oil, how much goes into headline, how much goes into core,

what the effect on GDP is, and solving this dilemma of higher inflation, but perhaps weaker growth from oil, that would be something that Powell would have to deal with. I guess the question is whether they can put Warsh in place for the June meeting. I think they probably can, can move pretty quickly, Mike, but the question is if Piro will let them. And I guess the other piece, you know, Melissa, you've brought this up a couple of times,

which is at least on paper, there's room for on Wednesday the Fed going to something like a neutral stance, right, thinking that maybe the next move is equally likely to be up or down. I don't think they do that, Mike. I think what they do is, I mean, technically that's what they may be doing. But I think they'll say, you know what, we're in a good place now because we're a little bit above neutral and we have this inflation impulse coming through. There's going to be two sides in this debate and we'll see a lot of it in the new forecast that we get. One of those is going to be like, hey, let's look through it and let's cut. We've already heard Myron say that. But there's

another side of that which says, you know what, let's just stand pat till we have more clarity. And maybe even a third argument is we look through tariffs. Maybe we shouldn't be looking through oil. All right. Steve, thanks. Pleasure. Steve Leesman. It'll be interesting to see how NVIDIA's follow-through is sure. That's what I think for tomorrow session. Yeah, we're going to have everybody on the cell side kind of break down what was said,

trying to run those projections through their numbers. It looks like a little bit of upside to the current consensus for revenue for the current fiscal year. We'll see if that actually matters, but the stock didn't really seize on it, right? We're still at a low 180s. We were here six months ago for Invidia shares. It does it for overtime. Fast money begins right after this quick break.