Closing Bell - Closing Bell Overtime: Salesforce Earnings; Private Markets Outlook Under Trump; Powering Bitcoin & AI 12/3/24

Episode Date: December 3, 2024

The S&P 500 and Nasdaq closed at record highs but the action continued after the bell: closely-watched bellwether Salesforce reported earnings and Wedbush analyst Dan Ives breaks down the key numbers. Our Leslie Picker reports on BlackRock’s bet on private credit while Raymond James’ Global Head of Private Capital Advisory Sunaina Sinha Haldea on what Trump 2.0 means for private market investors. Pure Storage CEO Charles Giancarlo joins to talk earnings exclusively before the call. Plus, Iren co-CEO Dan Roberts talks powering the bitcoin and AI booms—and which is more important for his business.

Well, that bell marks the end of regulation. Aflac ringing the closing bell at the New York Stock Exchange. Pledge 1% doing the honors at the NASDAQ. And it's proving to be a December to remember already with the S&P 500 and NASDAQ closing at fresh highs again. That is the scorecard on Wall Street. But winners stay late. Buffing the closing bell over time. I'm John Ford with Morgan Brennan.

Well, the communications services sector, the big winner today, hitting the highest level since 1999 thanks to big gains by AT&T and Meta, which I believe hit a record high today. Meantime, the Dow keeps underperforming the broader market. It's falling for the third time in four sessions. Investors now awaiting several big tech earnings highlighted by Salesforce. We will also get results from Box, Marvell Technology, Okta, and Pure Storage. And Pure Storage's CEO will break down those numbers for us in an exclusive interview. Before the call, well, Cloud Week rolls along tomorrow as well.

And over time, we'll speak exclusively with Pure. Well, we're going to speak with him today, as a matter of fact. But tomorrow, we've got Synopsys coming up as well. But right now, let's get straight to our market panel. Paul Hickey of Bespoke Investment Group and Deepak Puri of Deutsche Bank. Guys, welcome. Paul, not only is Salesforce a component in the underperforming Dow, it's the largest component in the IGV software ETF. I think just under 10 percent of its assets.

How influential then might these results be that we're about to get over how the major indices trade tomorrow? I mean, so I think as far as the software, it's going to drive the sentiment towards that space. The sector has been on an incredible run basically since May when Salesforce had its low for the year. It's up over 50% than Salesforce is. The sector is overbought. It just recently was at its most overbought level since 2020. And Salesforce has been short-term overbought, the measurement we use, for a record 53 trading days in a row now.

So expectations are high heading into this report. Not a lot of fundamental news, more on hopes that their agent force is going to translate into future results down the road. It sort of reminds me of we were talking last week about Palo Alto as it's, you know, seeing the short-term weakness in its results. But Palo Alto is on the platformization strategy, whereas Salesforce is having this shift to AI. So it's a longer term plan. We're going to be just watching for what management says on the call there. But for the market overall, we're in a bit of a lull period, I think, heading into the middle of the month and the inflation data next week. Well, I can see Octa's moving that out, but first we're going to get to Salesforce results with Seema Modi.

Seema? Mixed set of numbers from Salesforce. John, let's walk you through it for the third quarter. $2.41 adjusted, which is below the Wall Street expectation of $2.44 adjusted. Sales came in above expectations at $9.44 billion. The street was looking for $9.3. And I would point out that this is sales growth of 8% year over year. Mark Benioff, CEO of Salesforce, says we delivered another quarter of exceptional financial performance across revenue margins in cash flow.

He says AgentForce, which is the company's AI agent that revealed earlier this year for AI systems for enterprises built into the Salesforce platform is at the heart of a groundbreaking transformation. The rise of autonomous AI agents is revolutionizing global labor, reshaping how industries operate and scale. Now, when the earnings call begins, guys, we're going to want some more numbers around inbound orders and contracts from companies and how many new enterprise customers have signed up for the AI agent, which there's been a lot of enthusiasm around, which has helped the stock outperform over the past month. Back to you. All right, Seema, that stock now moving higher, bumping around a bit. It was lower initially on the results, now up about 2%. Deepak, I don't

know if you can talk about Salesforce at all, but I know you like smaller caps looking forward as well yes indeed high john so i think when you look at uh... the earnings uh... for twenty twenty five i mean you're looking at s&p uh... you know six hundred earnings to grow at over forty percent i mean that's one of the reasons why we think uh... you know the small caps is one of the ways to leg in you know kind of a barbell strategy uh... you know talking about earnings i barbell strategy. You know, talking about earnings,

I think they have to do the heavy lifting going forward. The valuation is already quite rich, no matter how you dissect it. So, I think primarily driven by that and also the fact that some of the underlying sectors within the small cap, be it regional banks, be it smaller media companies or energy companies, we feel there's going to be a regulatory relief that should help these underlying industries and sectors as well. All right. I want to get your thoughts, Paul, now that we did just get this result from Salesforce. It looks like full year revenue guidance might be a little stronger than the street had been anticipating as well as I go through these results here. But when we do talk about some of these tech companies,

certainly it's happened since the start of this week. We've seen that rotation back into some of these tech names and growthier names in the market, even as we've been talking about rotation for months now. So I guess where do we go from here, especially as we do tend to see these end-of-year rallies? Yeah, so I mean, I think to what Deepak was saying, I think what we expect to see is we expect to see broadening of the rally going forward. You know, we started to see that in the second half of this year. The MAG-7, which were richly valued, have started to, you know, see more disparate performance with each other.

Half of the, three of them are at least underperforming the S&P 500 year to date. And then you're going to start to see those moves expand into smaller cap. It doesn't take a lot to move out of these mega caps to cause a big impact on these smaller cap names. And so if AI is really going to be the revolutionary technology that we all think it's going to be, it's going to have to benefit more than seven companies. And it's going to have to benefit companies lower down the market cap space and to some of these smaller and mid-cap companies. OK, we've got Okta results out. We're going through those right now. We'll bring them to you here in just a moment. Deepak, I want to get to you because we look to 2025 and we're poised to finish off two consecutive years of 20% plus gains for the S&P,

which in and of itself is a very unusual feat. So how does that set us up looking to next year, especially since we do have all of these cross currents, including what seems to be resilient economic growth on the one hand, but lofty valuations for stocks on the other? Indeed. So a third consecutive 20 plus years is a rarity in stock market you know the hundred plus years of history that we have just happened twice so a lot depends on whether we are in a

mid-70s time frame or mid 90s mid 90s you know the first two years would start off another three you know, really bull market. What I would say, Morgan, is that bull markets don't end just because of, you know, the maturity. We have seen, you know, 10-year-plus bull markets just very recently. So, you know, this current bull market, let's say it started in November of 22. You're looking at a magnitude of 55 percent since then, two-year-plus. An average bull market lasts around 115% upside in four years. So, both from a duration and magnitude perspective, I don't think you want to fight the tape right now.

I think you still want to be long in. However, we are at the year end. It's a good time to really reflect on the portfolio positioning that you have and maybe what kind of equity exposure you want to have going as you get into the second half of this particular bull cycle. Okay. We've got some breaking news coming out of Campbell's. Let's get to Pippa Stevens for those details. Hi, Pippa. Hey, Morgan. The Campbell's company reporting earlier than expected just now. They were supposed to report tomorrow before the opening bell. The company reporting Q1 earnings of 89 cents per share, excluding items.

That was two cents ahead of estimates. Revenue, though, did miss expectations at 2.77 billion, while Wall Street was looking for 2.8 billion. Now, the company did also announce a new CEO. The board of directors elected Mick Bakhousian as the new CEO. He is succeeding Mark Klaus, effective February 1 of next year. Now, Mr. Klaus announced that in his plan to retire, he will be joining the NFL's Washington Commanders as their president. The stock a little bit in the green here. John? All right, Pippa, thank you. Box earnings are out.

Deirdre Bosa has those. Deirdre? Hey, John, so shares were down as much as 6.5%. They've narrowed some of those losses down about 3.8%. It's a beat on the top and bottom lines. EPS coming in at 45 cents adjusted per share versus 42 expected. Revenue a little better than expected to it, 276 million versus 275 million expected. Non-gap EPS guidance for the full year is also 3 cents above consensus. Q4 revenue guidance, right in line with expectations at $1.1 billion.

I did just speak to Box CEO Aaron Levy. He called out some of those Forex headwinds thanks to significant business presence in Japan. He said that the results were driven by AI tailwinds. He noted that Box is operating this margin, operating margin this quarter, 29 percent a record and driven by efficiency using their own software. Guys, that's Box earnings and shares are continue to sort of narrow those losses now down by only about one and eight tenths of a percent. OK, I think we're down three percent right now. Dear Jabosa, thank you. Okta earnings are out as well. Seema Modi has those numbers.

Hi, Seema. And Morgan, point your attention to the screen. Shares are surging here after a big 9-cent beat on its bottom line. Sales also coming in ahead of consensus. And subscription revenue of $651 million above the $635 million Wall Street estimate. Q4 guidance well above what Wall Street analysts were predicting between 73 to 74. I would point you to also comments from Todd McKinnon,

the chief executive officer of Okta, who says that focused investments that it's made in its partner ecosystem, the public sector vertical and large customers are materializing in our business, which each of these areas contributing meaningfully to top-line growth, which shares now up about 16% on this big beat and bullish guidance for the fourth quarter, guys. All right, Seema, thanks.

Big move for that. Big move also for Pure Storage. Those numbers are out. Let me get them to you here. Pure Storage beats on the top and bottom lines for Q3. Guides to Q4 revenue above the street. But because of a new hyperscaler deal that you're going to hear more about first here on Overtime Before the Call, the Q4 operating margin is a bit below the street to support what the CEO tells me is a significant deal. So the numbers.

Pure's Q3 revenue, $831 million versus $815 million expected. Non-gap EPS, $0.50 versus $815 million expected. Non-gap EPS $0.50 versus $0.42 expected. For Q4, the revenue guide is to $867 million versus $856 expected. Operating margin guide, though, is to 15.6% non-gap versus 18.4% expected. Now, CEO Charlie Giancarlo tells me that's to support this hyperscaler storage deal signed just a few days ago. It will scale, he says, quote, to the tune of tens of exabytes in calendar 2026. You'll hear from him before the call on overtime in just a few minutes. And there's a nice picture of Charlie. He's always got the hat on. the hat morgan all right um paul now that we've seen

uh salesforce certainly the most influential here but we've also seen octa outperforming and we've seen pure having a pretty strong trade in this session despite i mean actually now it's up 21 despite what uh the ceo says is a challenging overall enterprise environment. Does this tell us something about technology demand, even in the face of some macro uncertainty? Yeah, I mean, I think there's been a lot of concern outside of these AI companies as far as demand with company budgets. But some of these reactions that you're seeing in Okta and Pure Storage, it goes to the point of the broadening of the rally. Some of these reactions that you're seeing in Okta and Pure Storage, it goes to the point of the broadening of the rally. Some of these stocks are smaller cap names relative to Salesforce or

the other mega caps. A stock like Pure Storage has been in the dumps for most of the year, and it's just trying to break out of this bottoming pattern, which it looks like it's doing right now. So I think in that respect, investors are looking for other opportunities and trying to be original in their ideas rather than just focusing on seven names. OK, Paul Hickey, Deepak Puri, thank you both for kicking off the hour with us. Thanks. As we did get record closes, albeit fractionally for the S&P 500 and the Nasdaq yet again. Let's bring in senior markets commentator Mike Santoli for a broader look at the S&P 500. Mike.

Yeah, Morgan, of course, the rally in the S&P this year has brought it well above most strategist forecasts for year-end levels. I mean, I think they've mostly been left behind by at least 10 percent. But there is a fairly common technical target that has been on some radars for a while now, and it's 6,100, we're less than 1% below there. And the reason is, if you take a look, this is a three-year of the S&P 500. So this was the previous high, right? The previous high around 4,800, down to the low in late 2022, it was 3,500. That lost 1,300 points. Now, what some technical disciplines say is once you get back to that break-even level, you can add the amount of points lost to the prior level, the prior high, and say maybe that's the upside target. That's 4,800 plus 1,300 gets you to 61.

Nobody says this works all the time. Nobody says it's where the rally stops. But it's one of these ideas that there's kind of an equal and opposite reaction kind of assumption in here. And look at that. We are almost there. And by the way, at this scale, it makes that bear market of 2022 look really, really modest and gradual. It didn't feel that way at the time. Finally, I want to take a look at Apple, which has just made a move, made a breakout after going somewhat sideways for a while. And on a year-to-date basis, it has almost gone back

to touch the performance of the broad S&P 500. One thing I always like to point out with Apple, the fact that it's the biggest stock in the market doesn't mean it always behaves like the market or as a bellwether for the broad market. Because look here, we went pretty much up at a steep angle in the first part of this year. Over three months, there was a 20 percentage point gap

between the performance of that stock plus the S&P. And it's not unusual. Apple goes in these massive win streaks, then it consolidates relative to the market. But here you are, back in sync, at least for now, Morgan. And it's also, I think, being treated a little bit as an AI catch-up trade. I do wonder, though, because we have talked about it for many years now, Mike, the debate around Apple as a bellwether for the broader market. And the point

you just made there is that it's not, at least this year. But does that chart look different if you were to put NVIDIA up instead of Apple? It looks a whole lot different because NVIDIA is up whatever, 200 percent or so this year. So it makes the rest of the market look like it's gone almost flat. So, you know, NVIDIA. Look at that. Yeah. in the first half of this year, NVIDIA's added basically like two trillion dollars in market value. And that was, I don't know, 40 percent of what the S&P added to that point. Since then, NVIDIA's kind of held on to that two trillion. But the overall S&P is up like 11 trillion point to point over the course of this year. So obviously it was a big help in the first

half and it's kind of hung in there in the second half. All right, Mike, we'll see you again in just a little bit. For now, semiconductor maker Marvell Technologies up 8%. Its results are out. Seema Haslam. Seema. A two cent beat on its bottom line, John, for Marvell Technologies. While revenue topped expectations 1.52 billion versus the estimate of.4 billion, slightly light on non-gap gross margins. But what the street seems to be focused on are data center sales of $1.1 billion. That came in ahead of what Wall Street analysts were anticipating. The fourth quarter, which CEO Matt Murphy says is primarily driven by the company's custom silicon programs, which are now in volume production, further augmented by robust growing demand from cloud customers and just growing demand for AI in general, with shares now up 8% in overtime.

John? All right. Cloud and hyperscalers, Powering Marvell and Pure. Thanks. Well, up next, Wedbush's Dan Ives reacts to Salesforce earnings and tells us what he wants to hear from management when the analyst call starts at the top of the hour. Plus, Bitcoin miner Iron just increasing its mining capacity by a third. Coming up, the company's co-CEO on the outlook for Bitcoin prices and how cryptocurrencies will fare with President-elect Trump in the White House. I think he's got some stuff to say on AI, too. We'll be right back.

Welcome back to Overtime. Sales for shares are moving higher after reporting Q3 earnings results just moments ago. They're up more than 5 percent. Wedbush Securities Global Head of Technology Research Dan Ives joins us now. Dan, it's great to have you back on the show. Listen, they missed on the bottom line, but they did better on the top line. It looks like their full fiscal year revenue guidance is slightly stronger than expected, too. But I think the top line, it really seems like that's the focus here, because this is one of those tech names where there's been a lot of concern over the last couple of years about how much they can grow their sales. And here it is, 8% year over year. Is that what's driving the stock higher?

Yeah, Goldilocks quarter, because it also shows the AI revolution, the software piece is now coming to Salesforce. And you look at the way they've had issues clearly over the last year. I think it's a get out the popcorn moment. This is the start, not just for Salesforce, but for broader, for software, a huge moment where we are in the AI revolution. So in light of that, how much then is going to hinge on the commentary and the guidance we have relating to agent force specifically?

I think that's front and center. I mean, that's the goal at the end of the rainbow in terms of the agent force. I think that could ultimately be $5 billion, $6 billion a year as this all plays out. Hearing from Benioff is very important in terms of what they're seeing from a demand perspective. But, Morgan, we've talked about it. I mean, all of our checks are showing this is just the start. This is going to be a renaissance of growth for Benioff and Salesforce. This is a stock I think has massive upside over the next year. Dan, current remaining performance obligations up 10%

speaks well of the pipeline, but why don't you care about this bottom line miss? Yeah, I think, John, right now you want to see them just focus on spending, especially when it comes to what they're building out from an AI perspective. I think that was an issue that they had six months ago. So even though bottom line and margins was an issue, if you go back a year and a half, two years ago, no longer. I mean, right now, this is a phenomenal balance of growth. You look at what we see going forward double digit type growth i mean i think this is actually a stock that starts to get re-rated and broader the software piece of the ai party now comes it's not just oracle now it's salesforce service now you know many others of

course led by the messi of ai palantir so it's interesting you say that, Dan, because pure storage also has some costs kind of spinning up a hyperscaler deal that they're involved with. We're going to hear from the CEO on that in just a minute. Should investors get used to the idea beyond the hyperscalers themselves of companies having to spend Salesforce pure to capture that AI opportunity. Yeah, and that's why I made a phenomenal interview on the Pure Storage, because I think what it shows is about these second, third, fourth derivatives. We're talking about the biggest tech trend in the last 40 to 50 years. So investors, the street, they're fine if you're spending, if you're seeing the growth and you're seeing the deal flow. But now it's not just about Mag7, and those are going to continue to do phenomenal. It's about where in software, in cyber, in storage.

It just shows. Now this AI party, you're having the rest of tech come, which is why our view, tech stocks are up another 20% next year. This is just the beginning in terms of what we're seeing. Tonight's a huge night for broader software. Okay. Dan Ives, great to have you on. Thank you. Thank you. Thank you.

Salesforce shares are up 5% right now. Don't miss Jim Cramer's exclusive interview with Salesforce CEO Mark Benioff. That's coming up at 6 p.m. Eastern on Mad Money. Meantime, space exploration company Intuitive Machines announcing new capital-raising plans filing to sell $65 million worth of common stock. The offering is subject to market conditions.

And Intuitive notes there is no assurance that the offering will be completed. In an SEC filing, Intuitive Machines also said both the company and a selling stockholder have granted the underwriter an option to purchase about $9.7 million in additional shares. It also reached an agreement with private investor Boryung Corporation to sell another $10 million in shares. You can see Intuitive is down 12% right now in overtime. And, of course, John, this is one of those space names, commercial space stocks, that's literally building infrastructure and landers for the moon. It's very capital-intensive.

We talk about how capital-intensive AI is. Space infrastructure is, too. A lot of capital intensive stuff. Well, BlackRock making a $12 billion bet on the private credit industry. Up next, why there could be more deal making in that alternative asset space. Plus, Raymond James, global head of private capital advisory on whether we could see a wave of M&A under the second Trump administration. Stay with us. Welcome back to Overtime. BlackRock making a big bet on an industry getting a lot of buzz lately. Private credit, Leslie Picker has the details. Leslie.

Hey, and John, yeah, shares of BlackRock gaining nearly 2% today after announcing plans to acquire HPS investment partners for more than $12 billion in stock. HPS is one of the largest private credit firms with $148 billion in assets. And the aim of the transaction is to work with BlackRock's existing $3 trillion in public fixed income in constructing client portfolios, regardless of that public versus private label. The deal comes amid an explosion in popularity for private credit. According to PitchBook, private credit assets under management have grown more than 14 percent on average over the last 10 years, reaching $2 trillion earlier this year. Comparatively, the more traditional bank-syndicated loan market growth has averaged less than 6 percent over that time, with $1.4 trillion

outstanding. That growth has boosted the stock prices of private credit firms Blue Owl and Aries, each up about 50 percent this year, outperforming BlackRock and the broader stock market. I'm told as a result of public market clamoring for private credit names, HPS initially pursued an IPO, and that process caught the attention of BlackRock, which ultimately decided to buy it. BlackRock says its private markets fee-paying AUM will jump by 40 percent and will be modestly accretive to as-adjusted earnings per share in the first full year after close, expected in the middle of next year, guys. All right, Leslie Picker, thank you. It's a good setup for our next guest. So as a wave of Wall Street dealmaking on the horizon,

let's bring in Sunaina Sinhaz-Haldea. She is the Global Head of Private Capital Advisory at Raymond James, joins us on set. Sunaina, it's always great to have you here, so welcome. I want to start right there because Leslie just used the term private markets. We've seen this explosion in demands and appetite for it. The fact you're seeing BlackRock now jump in in a much more significant fashion,

what does it tell us about private markets versus public markets and investor appetite? I think you're seeing a result of great inflows into private markets over the last decade. It's culminating in interest from the majors like the Black Rocks who need to diversify out of public markets only plays and take advantage of the growth in private markets. Why do investors like private markets? Because there's relative value arbitrage there of buying low and selling high, buying at sensible valuations, adding value in the case of buyouts, in the case of credit, lending smartly to sponsored deals.

All of that has caught the attention of the institutional investor that has a sizable allocation into private markets, as do private wealth investors now. So the combination of the asset and AUM growth is what's attracting the BlackRock. Remember, it's not just HBS this year. BlackRock's done GIP, an infrastructure fund. It's done Prequin, a data gatherer in the private equity space. So they've made a very big move into private markets in 2024. It's a good point. And they've done it very quickly in just the last couple of months,

essentially, with those three names you just listed off. So how does this position us for 2025? There is a sense that the animal spirits have been unleashed. M&A is going to come back into the forefront. IPO pipeline is going to open up in a much bigger, more significant way. When you think about dealmaking, when you think about offerings to market, 2025, do we finally see all this pent up demand, the dam burst essentially? I think you continue to see steady evolutionary growth upwards. There were a lot of companies and a lot of founders who wanted to sell their businesses or private equity investors who wanted to sell businesses

from their prior holdings, that we're waiting for the outcome of the election. And now that the election is behind us, a number of those transactions will come to market in January, 2025, and we'll see the results of those processes come to the forefront sometime in Q2. So we're expecting a big take up in volumes Q2 onwards in the M&A world, but is it going to be a V-shaped recovery

like we saw in 2021 post-COVID? No, but it's going to, quarter on quarter, it's getting better. Volumes are getting better. Liquidity in the markets opening up. And I think it's a matter of when, not if, when we see the IPO window open. Well, when there's this much happening on the road in the markets, in the economy, you got to watch your blind spot. So how could this go wrong? Starting with private credit, what's the danger here for, you know, maybe first-time investors or first-time and long-time investors who are rushing into this market? Well, I think the big danger is what is your entry valuation and where can the accidents happen? The biggest risk in the markets right now is actually something that's happening live today. It's the geopolitical macro risk, the exogenous shock to the system from outside. On its own,

the U.S. economy looks very strong, a very healthy labor market, as we saw from the jobs number today, a soft landing or no landing scenario unfolding around us. I think that the U.S. market compared to U.K. and Europe looks incredibly strong and robust for dealmaking. What could spoil the party? I think it is what happens outside in the rest of the world, what happens in Ukraine, Russia, what happens in South Korea, what happens in elections in Europe and so forth. I think that's the big question mark, because that's what we saw in 22. We had a really robust market. And when the Ukraine war started, everything started to turn south again.

And that question mark, investors need to be able to price in whenever they enter any asset class. But I think on a relative value basis, private credit and private equity are better entry points today than many public markets. All right. Sunaina, thank you. Thank you. Good to have you. I mean, martial law in South Korea, a no-confidence vote expected tomorrow in France. Similar situation in Germany in coming weeks. There's a lot to watch. Well, we're getting some news out of United

Health. Pippa Stevens has that. Pippa. Hey, John. Well, United Health giving its initial guidance for 2025. Now, remember, they are still in 2024, and there is no change to that guidance. But for full year 2025, they see revenues between $415,$455 billion. That is ahead of Wall Street's expectations. But full-year adjusted EPS may be a little bit short here, $29.50 to $30, while Wall Street have been looking for $29.92. Now, the company has been hurt by higher medical costs in recent quarters, this news sending the stock about 2% lower. John? All right, Pippa, thank you. On Time Night 4, CNBC News update with Kate Rogers. Kate. Hi, John. Hours after he declared martial law plunging South Korea into chaos,

President Yoon Suk-yool said in an address to the nation he will lift his order following the parliamentary vote to block it. Earlier today, President Yoon justified the martial law order by claiming opposition parties had taken over the parliamentary process and were sympathizing with the North. But the pressure built to reverse course after even members of his own party came out against the move. The Trump transition team signed an agreement today that allows the Justice Department to do background checks on nominees and other appointees after delaying the move for several weeks. The agreement allows Trump's transition team, aides and future administration staffers to get security clearances before Inauguration Day. And Oprah Winfrey is expanding her media empire once again. She launched the Oprah podcast today. It will air weekly on her

YouTube channel featuring authors from her book club and other influential guests, including chef Ina Garten and U.S. Surgeon General Dr. Vivek Murthy. Back over to you guys. Can't believe it took this long for Oprah to do a podcast. I know. Kate, thanks. Up next, Pure Storage CEO Charlie Giancarlo breaks down his company's earnings with us in an exclusive interview before he speaks with analysts on the call. And Axon Enterprise, one of the big winners in the S&P 500 today.

Morgan Stanley upgrading the stock to overweight from equal weight and hiking its price target to $700 from $500 per share, citing its AI growth prospects. The stock is up more than 150 percent so far this year. Was on this show last week. Stay with us. Welcome back. Pure Storage shares are up about 24% here in overtime after the company reported fiscal Q3 results and guidance that beat consensus expectations. I spoke exclusively with CEO Charlie Giancarlo about it all before the analyst call. Yeah, we're seeing good momentum overall in the business. Look, the macro is a bit tough right now. There's a lot of pressure on IT budgets from an OPEX standpoint, higher software, higher SaaS pricing.

That being said, storage has remained robust, I would say, if not super strong. But what we're most pleased about this quarter is that our design win with a hyperscaler. We've been predicting this, as you well know, all year long. And we were able to sign that agreement a few weeks ago, and so we're very pleased. This is the first time ever where a hyperscaler for their standard customer-facing storage is going to be using a system vendor rather than just commodity hard disks and SSDs. And what we're providing them is a very cost-effective, high-performance solution that can replace 90% of their storage, which is hard disk today, and replace that with what's called direct flash technology. I also spoke with him about cost discipline.

We've overachieved on both revenue and on earnings, overachieved from a guidance and from a market expectation standpoint. And, you know, we're at 17 percent operating margin. We do expect that that will continue to improve over time. Although for next year, because of our investment in this hyperscale opportunity, we're expecting it to flatten out a little bit in the short term. Giancarlo said sales in Europe have been strong despite macro headwinds and international sales are beginning to climb above 30 percent of revenue. Now, tomorrow, Cloud Week continues when the CEO of Synopsys breaks down his company's earnings in a first on CNBC interview right here on Overtime, Morgan. Can't wait. Up next, Mike Santoli is back. He's going to break down what the latest JOLTS report

could mean for the economy and the Fed ahead of Friday's November jobs number. And shares of U.S. Steel. Check out those. Those are under a lot of pressure after President-elect Trump promised to block Japan's Nippon Steel deal from and from acquiring the company. You can see those shares finished the day down 8 percent. Stay with us.

Welcome back to Overtime Financial Services firm Prudential Financial. Just out with news of a change in the executive suite. Executive Vice President Andrew Sullivan will take over as Chief Executive Officer. That starts next March 31st. Sullivan has been with Prudential since 2011, is currently overseeing the company's global investment management business. He'll succeed Charles Lowry, who will remain as Executive Chairman at the insurance company for 18 months. You can see those shares, though, are unchanged right now on the news.

All right. Well, Mike Santoli is back now with a look at this morning's JOLTS data and what it could mean for the economy and the Fed. Mike. Yeah, John, the labor market is in a pretty good spot, but it's a little bit low energy in terms of the amount of activity in both hiring and the quit rate. So here are all the different metrics in that JOLTS report, job openings, labor turnover, the overall job opening level relative to the size of labor force, back to healthy but pre-pandemic levels. If you look at the hiring rate, that actually looks kind of low, right? You're going all the way back to sort of the early 2010s, mid-2010s, when it was a bit of a sluggish labor market. But nobody's laying anybody off. That's the bottom line right

there. That purple line shows you that it's not as if companies are really actively downsizing. And then the quit rate actually turned higher. Remember, that's a good sign. It means people generally will have either an actual job lined up if they quit voluntarily or they think they can get one pretty easily. So, again, this kind of fragile equilibrium here is still a healthy job market, but one that's not really racing ahead by these numbers, guys. All right. Mike Santoli, thank you. Well, Bitcoin is up more than 30% since the presidential election last month,

but has struggled to crack the $100,000 level. Up next, the co-CEO of Bitcoin miner, Iron, on the outlook for the cryptocurrency industry under the incoming Trump administration. And shares of Credo technology soaring today. The company, which makes high speed cables for data centers, beating earnings estimates, issuing strong guidance. Those results prompting Bank of America to double upgrade the stock to buy up nearly 50 percent. Be right back. Welcome back. Data center operator,

Iran, formerly Iris energy has been an under the radar AI and Bitcoin winner. So far this year, it's up 77% in 2024. It's up nearly 50% since we had the company on this show overtime back in August. I ran announcing this week, it has increased its Bitcoin mining capacity by a third after turning on the phase three substation at its facility in Childress, Texas.

And earlier this hour saying it will raise fresh capital, 300 million dollars in a debt offering. Shares are lower on that news, down about one percent right now. But Iron stock has actually outperformed Bitcoin even since the election last month as investors bet on its strong ties to both crypto and AI. Well, joining us right now, right here on set is Iron co-founder and co-CEO Daniel Roberts. Daniel, welcome. It's great to have you here. Thanks for being here. And that's exactly where I want to start with you, because on the one hand, Bitcoin, we've seen the price skyrocket. You have companies like MicroStrategy going out into the market and looking to snap up all the available supply as quickly as it comes online. Seems like a very big opportunity. It's where your roots are.

And then on the other side, even just this hour with some of the earnings we got, the fact that AI seems to be materializing in a more meaningful way across companies, whether in the case of just this hour, we heard about it from Salesforce, we heard about it from Marvell Technology, from Box. How are you thinking about these two different businesses and how they coexist? Yeah, it's a great question and thanks for having me, Morgan. Six years ago when my brother and I set up Iron, it was done on the premise of this digital world revolution we're going through. So the whole world's ongoing online, the digitization thematic. We quoted movies like The Matrix, Ready Player One. As a society, we're heading that way directionally. And for us, it was all about tying up the scarce resource, power, land, data center capacity. Because fundamentally, what you're dealing with in the digital world is exponential growth, compound growth formulas,

where adoption curves go vertical overnight, whether it's Bitcoin being zero 15 years ago to a trillion dollar asset today, whether it's AI a year ago, not being spoken about much to the next biggest thing. And ultimately, leveraging a real asset base, power, land, infrastructure into two of the most exciting exponential themes that I think will define the next decade is super exciting. So how quickly can you lock up power, land and some of these finite resources? I mean, we just mentioned the fact that you brought some more capacity online for Bitcoin mining, but how much more can you bring on? A lot. We've been planning for years. We've locked up 2.3 gigawatts of power and land

over the last few years. At one site, 1.4 gigawatts, recently announced in Sweetwater, Texas. 1.4 gigawatts today would represent one of the largest data centre markets in the world. Not projects, markets. It is enormous. I think the only larger market that exists today would be that of Northern Virginia. So how far out is the risk of overbuilding with all of this AI and crypto excitement and over leveraging in the process? So that's the funny thing. I'm talking about really big numbers relative to where the industry is now. But we're talking about requirements of 50 gigawatts, 5.0 gigawatts by 2030 of new AI data center capacity, according to McKinsey.

What we've got, despite it being really big relative to the existing capacity today, it's a drop in the ocean relative to where we need to go. And this is the whole real world, digital world dislocation. You've got these exponential growth drivers in the digital world, AI, Bitcoin, whatever's around the corner, but the ability to service that is dictated by real world

challenges and there becomes an inflection point where the real world can no longer scale exponentially. You cannot click your fingers and come up with tens of gigawatts of power and land. You cannot plug a computer into a high voltage transmission line. And this time to power narrative, it's absolutely real. It is taking longer. It is getting harder to build all this real world infrastructure to service these digital exponential trends. So what does the incoming Trump administration mean potentially? How are you thinking about policy as it manifests in 2025 and beyond for AI, for Bitcoin, where there is a lot of enthusiasm about what this could mean?

Yeah, look, it's undoubtedly been a positive for the markets. You've seen the impact to the Bitcoin price. You know, the Trump administration talking about a Bitcoin strategic reserve. I mean, that's a potential game changer. If you think simply of... Do you think that actually happens? I don't know. I really don't know.

But I believe that over time, Bitcoin is the scarcest asset. There's only ever 21 million. You look at it as gold 2.0. It's scarcer than gold. It's easier to transfer than gold. It's more divisible. All those attributes that gave gold value. Gold parity for Bitcoin is $800,000, $900,000 a coin.

We're still so early. Back to the data center capacity question. Do you have to be class A to be safe, both on capacity and on things like cooling? Because people can build a lot of stuff, put it a lot of places. Even if demand is high, it doesn't mean it's all going to get used. Yeah, look, today we've built a lot of our capacity in regional areas. And part of our business plan has been not just 100% renewable energy, but going to areas in the market where we can solve energy market problems. And in British Columbia, we've co-located alongside

old pulp and paper mills that were closed down as a lack of that industry demand. We've rehired a lot of the local workers, retrained them in data centre operations. We've built data centres there to use power in the market that was actually surplus. And there is absolutely nothing stopping us from servicing these AI trends. In fact, in British Columbia, our data center has Bitcoin mining ASICs, servicing the Bitcoin network, being paid cash every day for that, right next to latest generation NVIDIA GPUs, servicing AI cloud customers. Daniel Roberts, Iron Co-CEO. Thanks for joining us here on set. Great to have you.

Thanks for having me. Well, it's that time of year again. And no, we're not talking about holiday shopping. We're talking about the return of McDonald's McRib. Up next, we'll take a bite out of how the McRib impacts the fast food giant sales. We'll be right back. Holiday shopping season, sure. But it's McRib season at McDonald's as the pork sandwich makes a return to the menu. Kate Rogers looks at why the fast food item is only around for a limited time and maybe why it keeps coming back. Kate?

Well, John, it's all about the buzz. So the McRib, as you said, returning to McDonald's stores today for a limited time, as always. It's a fan favorite, sure to generate a lot of buzz at a crucial time for the fast food giant. In addition, it also sold out of its half gallon jugs of McRib sauce, which went on sale on November 25th while supplies lasted. This release really key for getting customers back to stores after a recent outbreak of E. coli tied to McDonald's slivered onions dented traffic in October, according to executives, which will fall into the fourth quarter earning cycle. Now, before that outbreak in the most recent quarter, U.S. same-store sales did rise. They reversed last quarter's same-store sales declines, but they were still slightly weaker than anticipated, and traffic to its U.S.

restaurants was slightly negative. The company credited its marketing and a $5 value meal launched in late June for the increase in sales. It's going to need buzzy items like the McRib, which was preplanned, and its upcoming expanded 2025 value platform to keep that momentum going. Now, today, company executives, along with the CDC and FDA, did announce the E. coli outbreak officially over. There were no new customers sickened post-October 22nd when actions were taken by McDonald's to remove those slivered onions tied to the outbreak from stores. As you can see, the stock is slightly higher. Back over to you. All right. Kate Rogers, thank you. Jugs of McRib sauce. That is what I took away from that. That's incredible.

But what does RFK Jr. mean for the McRib? Well, we're going to find out. I guess we are. I mean for the McRib? Well, we're going to find out. I guess we are. I mean, does it come back? He likes a McDonald's meal from time to time, too, if X pictures are any indication. Powell tomorrow. That does it for us here at Overtime. Fast Money starts now.