Closing Bell - Closing Bell Overtime: Michael Dell on ‘Invest in America’; Pure Storage CEO on AI Demand 12/2/25

Episode Date: December 2, 2025

Michael Dell joins from the White House first on CNBC after pledging over $6B to partially fund investment accounts for 25 million American children. He also discusses the broader AI trade and demand. Argent Capital’s Jed Ellerbroek and Innovator ETFs Tim Urbanowicz break down today’s market action. Pure Storage CEO Charles Giancarlo joins after earnings—the stock fell in Overtime but he makes the case for strong demand. Jefferies analyst Sheila Kahyaoglu on Boeing best day since April and if the bottom if in for the stock.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Let bell marks the interregulation. United Way ringing the closing bell at the New York Stock Exchange. SEC Chairman Paul Atkins doing the honors at the NASDAQ. And stocks are higher across the board. The Dow gaining about 200 points, the S&P 500, gaining about a 30%. The NASDAQ up about twice that. Boeing contributing more than 100 points to the Dow's gains. Positive comments from the CFO at a presentation today.

We got more on that coming up, and that helped lead the industrials. Tech, also one of the top performers, materials and energy, the lagging sectors. Bitcoin bouncing back today, back above 90,000, and that is the scorecard on Wall Street, but winners stay late. Welcome to closing bell overtime, I'm John Ford. Coming up, the president planning to give every child $1,000 at birth, at least children born within a certain window, and that's to be invested in the market. Michael Dell and his wife, Susan, pledging more than $6 billion to help fund those so-called Trump accounts. We're going to talk to Michael Dell about his donation, and we've got to be a bill.

busy slate of earnings today. American Eagle, CrowdStrike, Marvell, and Vox all due out and will also get results from pure storage and talk to the CEO before his conference call with analysts. But now let's begin with today's stock market gains and get to Sima Modi. Sima. Hey John, if we focus in on tech, the sector in general pulling through despite reports of OpenAI CEO Sam Altman sending a memo to his staffers outlining a code red effort to improve chat GPT amid heightened competition from Google's Gemini. This, as Anne, Amazon released a new AI chip that stock trading higher fractually on the day as at Oracle and Microsoft. Two big movers within tech, software player MongoDB, getting a lot of praise from Wall Street,

the likes of Morgan Stanley, analyst at City, following impressive earnings and an encouraged roadmap from their new CEO, C.J. Desai, stock closing up over 22%. And then there's networking player Credo technology ending sharply higher on a sizable beat and raise that stock now up 180%. are one of the best performing stocks in the NASDAQ 100. This, as we do, count down to earnings from CrowdStrike tonight, and then Salesforce and Snowflake, which will provide a really important lens on the health of software. John? Yeah, those are some big ones, indeed, over $100 billion on market cap on a couple.

Now to the bond market, Rick Santelli is in Chicago. Rick? Yes, John. You know, as we count down the days to the December ease and it's being priced in by the market as a high probability, we're seeing some yield curve steepening. Why? Well, let's look at a year-to-date of twos and tens. Tos are most closely associated with the Fed and the Fed activity. Right now, as a two-year sits, it's down 73 basis points on the year. A 10-year is down 49 basis points. That difference is the

steepening, and it seems to be accelerating a bit as we head towards that December 10th meeting. As you look at a 210 spread for one week, you could clearly see the last couple of days, it's been pretty much shadow boxing the 10-year, whereas the two-year is not having as big of an impact as it hovers right around 58 basis points. And that's important because as you open the chart up, it's the widest it's been since the early days of September. And many suspect that the steepening trade is going to be the trade for the next couple of months, as many continue to price in a more aggressive Fed easing down the road. John, back to you. Thank you. Well, now stocks are mostly higher today, as tech perked up and crypto prices seem to stabilize, so can the bull market keep charging into year end? Let's bring in Argent Capital Management Portfolium Manager, Jed Ellabrook, and Innovator ETF's head of research and investment strategy, Tim Urbanowitz. Guys, welcome. Jed, in this market, is a steady AI transition priced in? And how much is leverage a concern, whether we're talking about these big tech companies that are using?

leverage to build out data centers or, you know, hey, these investors that are using leverage to buy crypto? Yeah, I think we've seen the AI trade cool off really over the last month. I think the kind of peak there a month ago was, you know, Open AI's various spending commitment announcements where they just promised huge, huge amounts of spending that investors kind of blanched at. Ever since then, we've been cooling off, but I think underlying demand remains exceptionally strong.

Credo last night reported very strong demand and a really good outlook. I think we're going to see that from Broadcom next week, too. So I see continued exceptionally strong growth from AI-related semiconductor and data center spending categories. But I mean, are we, do we need for everything to continue smoothly with these names jet in order for the market to not fall apart? Or are we so priced for good things that a period of bad things is going to cause some real problems? I think that big tech is a humongous chunk of the S&P 500. So their results and growth matters greatly for broader equity markets, but I don't think expectations for that group of companies is exceptionally high. For example, NVIDIA's P.E ratio on next 12 months earnings is pretty reasonable.

I think it's under 25 times. Amazon reasonably priced as well. So I think that group is reasonably priced, and I have a pretty favorable outlook for that group. Tim, you're expecting S&P 7500 to year end. That would be a nice Christmas present. Well, that's the next year, John. So we see that happen in 2020. You know, I have to win a year for that Christmas present.

Yeah, exactly. We'll get you that next year. But, yeah, John, we think it's a supportive backdrop for equities. We obviously have that target for next year. But we also do think, John, it's going to be a year where the S&P 500 is really tested. We're heading into year four of this bull market. You look at every bull market since 1950, only 38% make it to year four and produce a positive total return. So it's going to be a year that we're tested.

And we also need to see, John, earnings. deliver. You look at the first couple years of the bull market. It was all about valuation expansion. That early days, that's what we see historically. But as we shift into year four, you look at those markets that have produced positive returns in that fourth year. It's all about earnings. More than 100% of the return is coming from earnings. So that's really important. Tim, all through last year, I heard so many people saying domestic stocks, domestic stocks, domestic stocks, exceptionalism, not messing so much with international. If you had some money in international or put some money into international last year, you've done pretty well

this year. Does that continue? And will the same sort of thing eventually happen with small caps? How soon, Tim? Well, John, we have been bullish on international all year long. That was a theme in our 2025 outlook. And really for us, it was all about the outlook for the dollar, which we saw was going to fall. We think that trend is going to continue. So we still think that can be bullish for international equities. And when we look at small caps, I think there's a lot of positives right now. You know, the main thing for us, John, is you're starting to see that earnings narrative change, where earnings expectations are starting to kick up. That's not something that we've seen over the last several years. And if you look at the returns this year, you know, valuations

have added nothing, okay? It's been all about earnings growth on the S&P 600 index. And most importantly, too, when we look at who the president's potentially bringing in as Fed chair, we think they're going to be doveish. We think you're going to see rate cuts. And that could be a potential catalyst for small caps as well. Yeah, I think he's looking for doves for sure. I have a feeling. Jed, how do you play defense in your portfolio now? Yeah, my favorite way to play defense is with Progressive, an auto insurance company that I think has significant competitive advantages over their peers. And I also think that auto pricing is going to hold up better than the market expects. Valuation is cheap, almost at a decade low. And I expect a big special dividend

announcement here in the next month, too. Aerospace? Yeah, Transdime is our favorite there. Transdime is an aerospace aftermarket company primarily. Aftermarket demand remains exceptionally strong because Boeing and Airbus have a huge backlog of planes that they need to deliver to airlines. So I expect continued growth from all three of their end markets. Defense, obviously big budget increases in the U.S. defense budget. Like I said, increased plane deliveries from Boeing on the way and then continued aftermarket growth. Okay, hold tight. We've got earnings from Marvell technology. The stock initially lower by about three and a half percent. Christina Parzenevolos has the numbers. Christina. Yeah, I can say beat, but not a massive beat.

Yeah, earnings per share of 76 cents, three cents higher than what the street anticipated. This is for Q3. Q3 revenues coming in at 2.08, just slightly, slightly higher. For Q4 revenue guidance, $2.2 billion, also a little bit higher than the $2.17 billion. Data Center revenue, that contributes a lot to their bottom line. Data Center revenue came in at $1.5.2 billion for the quarter, which was also just slightly higher. than street estimates. The company also, for gross margins, a little bit higher, but not by much, 59.7 for Q3, 59% for Q4. They are announcing, though, in their press release that they are excited to announce the acquisition of Celestial AI. This was a rumor from the information

earlier today, but now they're confirming that it's going to help with their, the fastest growing opportunities in AI data center infrastructure. So they're confirming that, so that could possibly be contributing to the negative reaction. and the fact that the beat was not that big. Okay, spending some money. Christina, thank you. Tim, how poised are you for the sort of year next year when companies will be spending,

perhaps trying to consolidate their positions strategically, or just spending on developers, development in tech companies? We saw some of that over the past couple months from the likes of Duolingo and others, and investors didn't love it. Well, John, I think you've got to keep your foot on the gas pedal on the AI infrastructure trade. I know there's a lot of concern and a lot of jitters out there about that we're heading

into this AI bubble. And I certainly think you need to manage risk well in your portfolio. But you've got to follow the spending. You know, can they generate this type of revenue? In our view, that's a conversation two or three years down the line. Right now, it's all about the spending, which you look at the hyperscalers. It's very clear. They're not slowing down.

They're picking that spending up. So you've got to stay in there. We think that's a trade that is going to continue to. drive the market, but also it is going to create some big swings in volatility. And I don't think that's something we've seen excessively this year. That next year, where the bull market is tested, a big piece of this is really going to be investors getting a little jittery around that where these companies have to deliver. So we're still bullish. Like a big westward expansion for the modern era. Tim, Jed, thanks to you both. Now we got American Eagle earnings out.

Gabrielle Fon Rouge has the numbers. Yeah, so American Eagle reporting Q3 earnings of 53 cents per share that's on revenue of $1.36 billion, beating expectations on both the top and bottom lines. For the holiday quarter, American Eagle is expecting Coms to grow between 8 and 9 percent. Now, that's about four times higher than expectations, so that's pretty big here. American Eagle also raised its full-year adjusted operating income guidance. It's now expecting it to be between 303 million and 308 million. Company-wide, the results look solid, but the growth was primarily driven by Erie. At American Eagle's namesake banner, comps grew just 1% while analysts were looking for 2.1%.

That's after its splashy campaign with Sidney Sweeney. While the campaign didn't have a major impact on sales, operating margin did come in better than expected at 8.3%. John? How is that possible with all of those genes? Gabriot, thank you. Well, coming out, Michael Dell joining over time to talk about is $6 billion-plus donation to help supplement new savings accounts for young children that passed into earlier this year, called Trump accounts. Overtimes back in two.

On this giving Tuesday, Michael and Susan Dell are announcing a $6.25 billion donation to be paid directly into the accounts of 25 million American children. That's $250 per child. The gift's designed to accelerate the impact of Invest America, the new national program, providing every eligible U.S. child with a savings and investment account that they can grow over time. Are Sarah Eisen joins now with Michael Dell on a first on CNBC interview. Sarah? Good to see you, John. And Michael Dell, welcome. Thank you very much for joining us,

first on CNBC from the White House with this extraordinary announcement. Great to be with you, Sarah. So tell us a little bit more, Michael, about how this is going to work. Sure. So as you probably know, the government, is going to set up this program that was put in place by the Invest America Act that was passed on July 4th earlier this year. And every newborn will get $1,000 starting for kids born in 2025 and going through to 28. And hopefully the government will continue with that. What my wife and I have decided to do is for the kids that are under 10 years old,

that are not included in the government program, so the sort of two to 10-year-olds that live in zip codes where the median income is less than $150,000, we'll be giving $25 million of those kids $250 to start their Invest America accounts. And, of course, these accounts can be used when the child turns 18, it becomes like an IRA, they can use it for education, for starting a business, for buying a home, for starting a family, for continued savings. And look, we know that when kids have accounts like this, they're way more likely to graduate

from high school, to go on to college and graduate, to, you know, buy a home and be successful adults that participate in our economy. And so we're super excited about this, and I've spoken with other philanthropists, and I'm confident that we'll see some other major gifts, maybe not exactly designed the way ours is, but we know that this is a platform now for companies to contribute and match the government's contribution. Certainly that's something Dell and many other companies have already said that we're going to do. Families can contribute friends and, of course, communities, other philanthropists. Yeah, and the idea is that compounding will help.

these kids and them to grow their investments. So that's one thing that I was going to ask is, are you hoping to inspire and have you heard about others who are willing to make similar contributions and just how big can this get? I think over time this can become quite substantial. And we're particularly excited about the long-term impact of this when you think about compounding and, you know, think about a child that's born, you know, this year, gets $1,000 from the government. Let's say they work at a company that matches that. Well, it's $2,000. Now, you know, if the parents or, you know, a grandparent or a cousin contributes a little bit to that account each month or each year, you can pound that over time.

By the time the child is 20 or 30 years old, it adds up to be substantial. amounts of money. And, you know, when I was eight years old, I got a past book savings account, and I kind of learned about the power of compounding. Unfortunately, we've got a lot of people that are not participating in the system today. And so we hope that this will create great interest in understanding compounding and financial literacy and investing in the market. All these funds, by the way, will go in a large index fund, essentially the S&P 500, you know, And that will be a great investment over time. Yeah, and hopefully young CNBC viewers, too, as they watch their investments.

So, Michael, who's idea with it? You should have a lot more interested viewers as they look on their Invest America app and they see they've got a piece of all of the great companies in the United States. All about that. So, Michael, whose idea was it? Is it something that you and Susan came up with or did the administration approach you? How did it actually come together? Well, you know, Brad Gersner was on your program.

earlier today. And I believe he first talked about this on CNBC in 2021. That's when he explained it to me. I think I might have been watching CNBC when I heard about it the very first time. And I talked to my wife about it. And, you know, we've been thinking about this for a while. We didn't start out with the idea of 25 million children and $6.25 billion. We kind of originally thought about doing something just in Texas. But then as we thought about it more and certainly our foundation has been focused on children from the beginning. We thought this was really an incredible opportunity to do something very special here.

And we're super excited about the impact that this can have. And again, if a child believes that they've got a future worth saving for, we will have helped to build something far greater than an account. This will help the country. It will help build hope and an opportunity a prosperity for a generation of young children to come. Well, you know, so when you say that, you know, I think about this recent survey and, you know, our new mayor of New York City, Mayor-elect Mamdani, there's Cato Institute, did a survey finding

62% of Americans, age 18 through 29, have a favorable view of socialism. 34% say the same thing about communism. And I do wonder if what part of your after here is to win the hearts and minds. of young Americans in favor of capitalism? Well, most certainly that is a hopeful byproduct of a program like this. And, yeah, I mean, I think we have had too many people not participating in the system. And, you know, if I think about the 25 million children that will get, get $250 each from our gift, the vast majority of those children may not have had any savings

account ever, much less one that compounds with, you know, the S&P 500. And so, you know, maybe there's not an incentive to even learn about these things if you don't own a part of it. There are already 30 states that require at least one semester of financial literacy. hopefully we'll get all 50 states and hopefully the interest in this will increase over time as people begin to see the value of those accounts, companies contributing to these accounts and maybe instead of a disposable gift that lasts, you know, for just a little bit of time, a parent or a relative will put a little bit in the Investor America account of a child

and that will grow over time into much more substantial sums. I mean, I know how patriotic you guys are, Michael, but I do wonder at any point whether you had any concerns about political backlash of this, you know, working with the administration, funding the Trump accounts, you know, still as the CEO of Dell, who has to do a lot of deals and work with the administration, were you concerned at all about how the optics would look, whether there would be any conflict or backlash? Well, to be clear, this is not a political initiative on our part.

And, you know, the support for these accounts is clearly bipartisan. You saw earlier today, Senator Cory Booker signed a letter with Ted Cruz, encouraging companies to match the government's contributions. I spoke with Senator Booker yesterday. He's incredibly supportive of this program. And there is broad, bipartisan support. And, you know, again, this is not a political initiative. Okay, well, that's good to hear.

You know, while we have you, Michael, all day on CNBC, we're talking about the AI trade. And I know you guys just reported, and the AI trade has been good for Dell and your server business is on fire. But there are some real questions now about the speed and the size of adoption and whether these high expectations that the market has around AI will pay off. How do you view it?

The way I look at this is if you think about the $114 trillion economy that we have, you know, roughly two-thirds of the economy is based on knowledge worker services. And if that knowledge work and services can be improved and made more efficient and more productive by, let's say, 5%, the amount that's being invested in AI could actually be not enough. And at least I can tell you from our business, when we talk to the neoclouds and the sovereign AI opportunities and certainly the growing demand from enterprises, as they begin to deploy AI, there's a tremendous amount of demand out there, and I think it will continue. So you're not worried. You're not worried about the bubble concerns, the competition that's emerging, the code red for open AI. You know, this is all the latest market fixation. You know, there will be lots of companies playing in this space.

I would tell you the big concern right now is that there's actually not enough capacity in the advanced node semiconductors and the other components that we need based on the demand that we see. It looks to us like 2026 will be a year where there is more demand than there is supply. And then just finally bringing us back to the announcement today, your investment is all about children in America and giving them the tools and giving them the investments. what would you tell kids about their AI futures and what sort of skills they need and what sort of jobs they look to

as we wonder, you know, about the rising unemployment in places like college graduates? You know, I think it's really important that kids and, you know, education, our education system emphasizes critical thinking and the ability to analyze and understand and these sort of underlying concepts without the use of tools.

At the same time, I think, you know, everyone needs to be resourceful. You know, at sort of the heart of this debate is will the amount of productive work that occurs in the world expand as we get these tools, or will the work stay the same? And we just won't need as many people to do it.

And you can put me down for the economy is gonna expand. and the amount of productivity and economic growth will expand over time. Certainly there will be dislocations, and not all of this is going to be an easy transition, but ultimately I think it will result in tremendous growth for the economy and opportunities that exist, for sure. Well, we're thrilled to have you here today, first on CNBC, Michael, to help announce this extraordinary commitment from you and your wife. Thank you very much for taking the time to talk us through it. Oh, thank you, Sarah. You know, look, we believe there's no smarter investment than investing in our children.

Yeah, amen. Michael Dell from the White House. Thank you very much. John, I'll send it back to you. And Sarah, thank you as well. Crowdstrike earnings are out. The company beating on EPSN revenue, earnings per share coming in at. at 96 cents adjusted versus estimates of 94 revenue beating slightly at a buck 20 sorry at a

1.23 billion versus estimates of 1.22 third quarter subscriptions revenue and annual recurring revenue both beating estimates you can see the stock is up fractionally speaking of earnings pure storage results out as well the stock sinking down 11 and a half percent after hours the company reporting earnings per share of 58 cents a share that's in line with Estimates revenue coming in a little better than expected at 964.5 million product revenue beating, but subscription services revenue missing. CEO, Charlie Giancarlo, is going to join me exclusively to break down the results just ahead on Overtime when we're back in two. Welcome back to Overtime. Green on the screen today, except for the Russell 2000 small caps there. All the major averages arising, the NASDAQ with the biggest gain, all the MAG-7 stocks, closing higher as well, except for Tesla.

Lots of overtime movers today, meanwhile. Let's start with the big gainer, American Eagle soaring, earnings of 53 cents a share, 9 cents ahead of the estimate. Revenue also a slight beat. Growth was stronger at its airy stores compared to its flagship American Eagle locations, and saying the tariff hit during the quarter was $20 million. dollars. Marvell technology moving to the downside here in overtime, down almost 6%. Small beats in both earnings and revenue, also guiding to a beat for Q4. Box also lower here in overtime by more than 3.5%. Earnings in line with the estimate, very small beat on revenue, guiding right in line with the consensus forecast as well. Now time for a CNBC News update with Julia Borsden.

Julia. Thanks, John. Secretary of Defense Pete Hegseth said he did not see there were survivors in the water during a follow-up strike in the Caribbean, the Caribbean September on an alleged drug-carrying vessel. He said the fog of war obscured visibility. Hegset also said he didn't stick around for the rest of the mission and that the Navy Admiral in charge made the right call in ordering a follow-up strike. Since the September incident, the U.S. has conducted another 20 strikes on purported drug boats, killing more than 80 people. The all-girls summer camp where 25 campers and two counselors were killed during disastrous July 4th flooding in Texas announced a plan today to reopen. Camp Mystic said it installed 100 flood monitoring units

and will move operations to a new location. And Serena Williams took a major step toward returning to professional tennis. The 23-time Grand Slam champion notified the International Tennis Integrity Agency that she wanted to be reinstated in his anti-doping testing pool according to the athletic. Williams played her last match at the 2022 U.S. Open. Back over to you. All right, Julia Borsten. Thank you. Now, pure storage shares are down about 12% after reporting earnings as subscription revenues missed. Up next, the company's CEO is going to break down the quarter ahead of the analyst call. And check out shares of MongoDB. It was a huge winner today after reporting an overtime yesterday, hitting a 52 week high after beating earnings estimates,

and significantly hiking its full-year outlook, thanks to growth in its cloud database platform and a little bit of AI tailwinds. I did speak with the CEO, C.J. Desai, yesterday about the results. Here's what he had to say about hiring in this AI environment. We are still growing our headcount, and we will continue to grow headcount. I talked about our deferred investments, so we'll continue to invest in go-to-market teams,

as well as all products and technology team. and, of course, for the next fiscal year, we will guide in March. But right now, we are actually increasing our headcount while we are leveraging AI where applicable to increase the productive. Pure Storage reporting results this hour. EPS coming in in line, revenue beating. The company sees fourth quarter revenue of $1.02 billion to $1.04 billion. That's a little ahead of estimates.

but in overtime, the stock is dipping down 12%, where it was just two weeks ago, just above 80 bucks a share. Joining me now is Charlie Giancarlo, Pure Storage CEO. Welcome. So tell me about the quarter. The numbers on the top and bottom lines look good, but perhaps investors concerned about the subscription business? Well, actually, the subscription business has been growing quite nicely.

We did get more customers choosing term licenses for some of our software products this last quarter, But overall, our storage as a service business grew 25% year over year, continues to grow faster than the company overall. So we're actually very pleased with the pace of our subscription business. We're now about 46% of total revenue in subscription, and that continues to grow every year. Anything lumpy in the demand patterns? Not really? No, not at all. In fact, what we're seeing is good growth across the board.

good growth in our product business, subscription business, the software business, and of course, you know, selling it now into the hyperscale environment. That was a good quarter for that as well. So really, honestly, we didn't expect quite this reaction, but one never knows until the next day what investors are really thinking. Well, it's certainly going to make some people pay attention. I seem to recall us talking a few quarters ago about entering into that hyperscaler space. What can you tell me about how that's progressing and the importance of fast, high-performing flash storage in this inferencing AI environment? Well, the hyperscale business for us is performing actually quite well. And we continue to grow it quarter after quarter.

We expect it to expand into other hyperscalers as we go forward. And it's an area where really we have no competition other than SSDs and hard disk drives. And of course, right now, demand for everything in the hyperscale market is just booming. So that gives us a new opportunity in order to penetrate those large areas. What flash brings to the picture is not just performance. And what our direct flash brings is both performance, but also dramatically lower power space and cooling. So, for example, compared to hard disk, we're about one-tenth of space and power and cooling of that environment. that saves a lot of power for the hyperscale companies that are really power constrained as they get

into the AI environment. Interesting point. I guess since you don't have to spin anything around, you don't need as much power to run it. Do you eventually run into a situation where the energy needs for data centers overall constrain the ability of your customers to build out and to get your equipment and technology into use? Well, we're seeing it constrained the hypers already, right? And there's a large amount of scrambling for power wherever it can be found. And therefore, use of our technology in their existing data center environments, where storage might be 25% of their total power consumed, we can bring that down to less than 5%. And so that gives them that extra 20%, they can use for other things such as AI.

So are you saying that it's not so much just newer data centers, but the hyperscalers and others because of the power needs are going to be incentivized to go back and swap out other types of storage for yours, you believe, because it operates more efficiently with less power? Something similar to that. What they do is they upgrade the entire data center on a periodic basis every five to seven years. So as they're going through that upgrade process, they'll replace everything in the data center, including the storage. And that's the big, that's the big opportunity. So as you look ahead into 2026, are there macro concerns on Are you seeing global demand picking up to the degree that makes you optimistic?

We are. We're seeing total demand pick up, whether it's in the subscription side of the business or in the product side of the business. Now, against that, we also have supply chain constraints. When I say we, I mean the entire industry now, there's so much demand that's taking place, largely because of the AI opportunity, that it's putting constraints on the entire component, supply chain. All right. Stock's off the lows. I know you got a call to get to. Thanks for joining me here on overtime. Before that, Charlie Giancarlo is CEO of Pure Storage.

Thank you for having me, John. Take care. Take care. Boeing is the big gainer today. The stock contributing nearly half of the Dow's games on hopes for its turnaround plan. But the stock's been dead money for five years. Is it finally time for it to take off? We'll be right back. Welcome back to overtime. Are investors clearing Boeing for takeoff? The stock posting its best day since April. It was the top performer in the Dow and the S&P 500, and that's after comments from its new CFO, saying he expects higher jet deliveries and positive cash flow next year. Boeing closed above $200. It was $177 just over a week ago. Here with Moore is Jeffrey's Senior Equity Analyst Sheila Kayaglu. She has a buy rating and a $255 price target on Boeing. So closer, Sheila is Boeing, the new GE? You know, I think Boeing, GE is a beast of itself. You know, it works on aftermarket momentum, but Boeing has 50% upside potential from here. And the two things that got to stock moving today was Jay Malave's comments around

26 free cash flow being positive because we've seen free cash flow trend down from $6 billion in estimates over the summer to $2 billion today. And some byside feared it would be zero. So we got out positive, low single digit free cash flow numbers for $26. But what also got the stock working was potential for $10 billion. This is the first time the company's reiterated or talked about its $10 billion free cash flow target. And of course, at a market multiple, this is a $300 plus stock if it does get there.

And I just mean in the GE comparison, GE was a mess for a long time. We were starting to rebound but couldn't seem to surpass its previous highs. But then, you know, it has over the last quarter or two. What is going to cause that kind of inflection potentially for Boeing? And how long would it take? So there's a few things. One, there's rate increases. We've seen positive rate momentum.

This is a stock, 737-87. We're producing in the 20s last year and single digits, three aircraft per month. Now we're at 38 going to 42 on the 37 and seven aircraft going to eight a month. So we've seen tremendous rate momentum. Second, improvement in concessions. Even 2026 has concessions in those numbers. Boeing makes anywhere from about 5 to 10 million per aircraft in terms of free cash flow. That's not a big number. So we want to see that number go up, profitability in free cash flow per aircraft. And that means less concessions, more on time deliveries. So those are the two things that are going to get the stock

working. And the third would be removal of negatives. That's the triple 7x. That's using about $4 billion of cash this year and next, and the second is defense. That's using $2 billion of cash this year and net neutral next year. And then, of course, portfolio. I think that goes back to maybe the GE comparison, John, is GE let go of its bad businesses. With Boeing, it's more stripping out businesses that don't make sense and making, you know, divestitures to fund debt paydowns, etc. Let's keep up that three-month comparison there between Boeing and Airbus, if we can. I wonder if Boeing is also partly getting some sentiment benefit from Airbus's struggles. For a while, it seemed like Boeing couldn't do anything right, and Airbus was doing everything, right?

Yeah, it's interesting because the last 48 hours have brought on friends who said, oh, these Airbus issues remind us about Boeing Max. And I'm like, yes, but they'll pass. The FAA updated those mandates. came through really quickly. So, you know, I think Boeing has potential to do a lot better free cash flow than Airbus does. Airbus right now is delivering 800 aircraft for 2025. That's what Boeing did at the peak in 2018. If Boeing could do that in 2028, it could probably earn double the free cash flow Airbus does per aircraft. So I think Boeing is in a better position, but they need to get the deliveries right. And I think they need to deliver on time. That's a big improvement that Kelly Orkberg is looking to drive. Because of these problems in a way, is Boeing somewhat insulated from macro issues?

Because, I mean, there's a huge backlog out there. If they can execute, even if some of the global demand in general slows down, people are still going to need planes, right? Yeah, air traffic's actually very strong. We saw October data come out. Air traffic is growing at about a 5 to 6% rate. You're retiring 1 to 2%. So you need 4% increase in aircraft deliveries. per year no matter what. So we need the planes. There's supply chain that gets you there and production. It's hard to build an aircraft.

It's over one million pieces. So you're not going to get beyond certain rates. And that's where you could push pricing through. And that's why I think there's a big opportunity for Boeing in a clean year like 2028, where you could actually use pricing power to have airlines receive aircraft. So we need, and that's why I heart more on less concessions rather than higher rates. because I think you're going to hit a rate limit at some point where 52 on the max and on 787, it'll be 10, they're expanding capacity at our 14.

But it's more important to get that pricing power through. All right. Sheila, thank you. Sheila, Cayaglu. Still ahead, we're going to look at whether investors who bet on beaten down consumer staples names like Procter and Gamble could be rewarded with a bounty of gains in the near future. And you can scan this QR code on your screen right now for a special limited time opportunity to join CNBC Pro. You get exclusive analysis, real-time data, and deep dive reporting.

We'll be right back. Let's get you ready for tomorrow's trade today. Earnings before the bell will get results from Macy's and Dollar Tree. Then here on overtime, Salesforce, Snowflake, and C3AI. And on the economic front, we'll get the ADP employment report, as well as September import prices and industrial prices. production. Well, Procter and Gamble's slide today puts the spotlight back on consumer staples, a cautious tone from the CFO, reigniting concerns about pricing power, margins,

and just how defensive this space really is. Mike Santoli is here with a closer look. Mike? Yeah, John, I mean, as a group across the board, it's been pretty much dead money for a while. Take a look at the equal weighted version of the consumer staple sector. That's RSPS. pretty necessary to look at it this way because the market cap weighted group is dominated by Walmart and Costco, which aren't really about kind of consumer branded goods. So you see pretty much flat against consumer discretionary as well as the overall equal weighted S&P 500. So people don't seem to think that they're sustained pricing power, demand for these old brands, any of the rest of it. And what's happened to valuations is what used to be very premium valued stocks like Procter & Gamble and Kohl-Gay-Palmolv.

They were sort of seen as all weather. They managed to sort of do okay in a strong consumer environment and be defensive in a poor environment. It's been pretty much compressed down to about 20 times forward earnings. Now, that's not outright cheap, but look at it relative to the S&P 500. And this goes back, as you can see, 20 years. So it's pretty much as cheap as these stocks have been compared to the overall market, which is admittedly inflated by some of the high-tech valuations. The question is, is this genuinely a contrarian opportunity for a long-term?

term holder, or is it a value trap that shows you the market structurally believes that these businesses are just not as good as they have been in the past, or at least that investors gave them credit for John? I guess, Mike, there's a case to be made that it could be good for Costco, Walmart, Amazon, these huge retailers that have their own internal brands that they're selling for less if these name brands can't get the premium. Yes, it seems like that's where the power lies, that's where the relationship with the customer sits and the market is happy to kind of embrace that. I do want to be mindful,

though, that there was a time, let's say three months ago when I might have made a similar case for branded pharmaceuticals and other health care stocks that nobody seemed to be interested in. You kind of can light a spark under these groups. Maybe it's going to take a little bit of a macro growth scare to get them going. But it wouldn't be surprising to have some excuse come along to have people rediscover these old blue chips and see if maybe that they're underowned and can have some upside. Takes a lot to kill a storied brand, I guess, yes? Yes, without a doubt. You can put them on the sidelines for a while, but they tend to come back. All right. Mike Santoli, thank you. Now, as we recap what happened in the markets today,

all the major averages, at least the three big ones, Dow, S&P, and NASDAQ hired today, particularly the NASDAQ. The Russell, though, that was the laggard down just fractionally. That's going to do it for overtime. Fast money starts now.