Closing Bell - Closing Bell Overtime: Sequoia Capital Splits Into Three Firms; Should Apple Buy Disney? 6/6/23

Episode Date: June 6, 2023

Major averages closed higher today after yesterday’s weakness. Wells Fargo’s Scott Wren breaks down the market action. Coinbase shares tumbled 12% today after the SEC unveiled a lawsuit against the company; former SEC Chairman Jay Clayton weighs in on the action this week from the SEC against Coinbase and Binance. Sequoia announced it is splitting its firm into three: China-focused, India-focused and the rest of the world. KraneShares CIO Brendan Ahern discusses the current landscape of investing in China. Magic Leap CEO Peggy Johnson discusses her companies headset and its enterprise customer base, plus competing with Apple Vision Pro. Needham’s Laura Martin makes the case for why Apple should buy Disney. Doximity CEO Jeff Tangney talks digital platforms for physicians. 

Well, you got your scorecard on Wall Street, such as it is, but winners stay late. Welcome to Closing Bell Overtime. I'm John Ford. Morgan Brennan is off today. We've got a big show coming your way. Coming up, we're going to talk to Needham analyst Laura Martin, who says Apple should buy Disney following the launch of the new Vision Pro headset. Plus, we're going to talk to former SEC Chairman Jay Clayton about the state of crypto after

today's news that the sec is suing coinbase over allegations that it was operating as an unregistered broker and exchange but now let's get into today's market action with our first guest joining us now scott wren from wells fargo investment institute scott welcome this feels like a dangerous moment for investors in the market right now and there wasn't a ton of movement when the day was over. The Dow is just about perfectly flat. But there's the danger of standing still, right? Because if you had, you know, sold out of the market earlier this year expecting things to go bad, you feel like a fool there. And also the danger of acting too rashly at this point. What should investors do based on what's gone on so far?

Well, John, for us, first, let me say that, you know, we're not chasing this rally. And what we've done is we've moved some cash into short term fixed income. You know, whether you're looking at three month, six month, 12 month bills, you know, the yields over 5%. So we're parking cash right now. We think we're going to have some sort of a pullback here. Is it going to be a 10-plus percent pullback? I'm not so sure about that. But we think the upside's limited here. So we're playing defense right here. We took a little money off the table, bought a large cap, bought a mid cap,

and moved that into some shorter-term treasuries. Okay, but I think that's what investors probably need to figure out, is how much percentage-wise do you take off the table and then how soon do you start buying back in? I mean, is it like a 10 percent sort of thing when you've gotten this sort of move even in the S&P just so far this year? And are you buying like a 5 percent pullback if you're not sure it's going to pull back 10? Well, you know, a five percent pullback i mean that can you know that can happen on complete noise so i think that uh of course you know it doesn't pay historically to be out of the market for very long so let's take for instance if you

have a traditional 60 40 uh portfolio we're more we're more like 50-50 right now. And so I think we've been looking for the range, which granted we're above the top end of the range, $3,700 to $4,200 this year. Are we going to get down to $3,700? Potentially not. But we do think a pullback north of 5%, probably closer to 7% or 10% can happen. And we want to make sure that we have a plan to step in and execute if we see that kind of a pullback. Now, you're saying 50-50 equities fixed income? Yeah. I mean, if you're looking at a traditional 60-40 model of moderate growth in income, we're about 50-50 right now, and I know that the short-term securities that you're talking about, the short-term debt and fixed income, that's not 50%. That's just a little bit.

That's just, it sounds like a drop. That's correct. I mean, that's just bad. Yeah, that's just taking some money out of equities and putting it in fixed income. Given that it looks like we're going to be higher for longer, right? There's a pause right now and the next move very well could be higher. How much are you building a fixed income position that you expect to ride for a long time? And then how much risk in FISC's income are you willing to take, given the fact that, I don't know, companies seem to be holding up pretty well right here, might not get

into too much structural trouble. You know, I think there's definitely some risk in the short term. And, John, part of this problem is, you know, is we've had everybody come into the year negative. I mean, just think of the people that you have on your show and the network has on their show. You know, 90% plus people have been negative. They continue to be negative. And when everybody's leaning the same way to this magnitude, what's the market usually do? You know, it moves the way to frustrate the most people, which in this case is up. So, you know, we're looking at we're not looking for much follow through here. We do think we're going to have an opportunity,

as I think about the headwinds in our in our opinion, at least from the Federal Reserve, you know, they're not going to cut this year. The money supply is crashing. We think earnings estimates are too high. The curve's inverted. You know, we can think of a lot of things that are out there that are going to be headwinds as we move into what we expect to be a moderate recession here in the second half of the year. To your point, Scott, to your point, beginning of the year, end of last year, a lot of people were saying, oh, stay away from tech, stay away from non-profitable tech. But a lot of the move that we've seen this year is in, you know, medium-sized or smaller stocks. I mean, you know, NVIDIA excluded that have considerable growth, a clear path to profitability, but aren't profitable yet.

Samsara comes to mind for me as well as a number of others. What should the investors approach be to those things given the run that we've seen so far and for some smaller stocks the run hasn't been that far valuation wise. That's right. I mean we're you know we're we're underweight small caps. We've liked technology. I mean we've you know that's been a nail biter from time to time. But right now, we think you need to continue to be overweight technology. You continue to really overall play some defense with that extra cash position. We're underweight industrials and financials and real estate and a lot of things that are very sensitive, high yield, things like that that are very sensitive to economic growth. And we think those will be probably some of the things we're interested in halfway through the recession

or when we start to think there's going to be some brighter skies on the horizon. But between now and then, we want to be a little bit more careful. We think there's a good probability we're going to have a reasonable pullback here. And we just want to make sure that our clients have a plan so that when it happens, they do what is really tough for retail investors to do, which is step in when you feel, you know, kind of bad and you have some indigestion about buying stocks. We think they're going to have that opportunity. Helping us strike that balance. Scott Grand from Wells Fargo Investment Institute.

Thank you. Thanks, John. All right, now CNBC Senior Markets Commentator Michael Santoli joins us from the New York Stock Exchange. Mike, what's on your radar? Well, John, the market's starting to answer some of those complaints that the market was too narrow, wasn't brought enough participation by the average stock. And you've actually seen the equal win at S&P today and also over the last three days make up a little bit of ground. But you still see the gulf here. So here's the S&P 500 leading the way, 11.5% year to date. This is the S&P 500 excluding technology.

So you can see, obviously, the huge impact that just the bull market moves in the tech sector. And then you have the equal weight. So, you know, again, we can make up some more ground here. We never did go back below March lows in the average stock. So it seems like there's more to prove on this front, but it's moving, at least in the last few days, in the right direction. We'll see if that's just a head fake or not. Also, I think within financials, you also see evidence of the market kind of localizing the pain within the banks, the ones directly impacted. And here you see the consumer finance subsector of the S&P, which I think is very telling. It's up nicely on a year-to-date basis.

It's actually kind of gone above the first quarter highs. That's mostly credit card issuers at this point. So it shows you that the weakness in the banks is mostly a business model and a deposit funding cost issue and not credit rot throughout the household sector. So I think that's a net positive message as long as it continues, John. Big tech versus small banks. I mean, is that kind of the story? That's what it is. Those are pretty much the two ends of the of the poll at this point so far this year. So, you know, we'll see again. A lot of it is mean reversion. A lot of it is just because

big tech got washed out at the end of last year. But usually, and everyone's scrutinizing the internals of this market to say, you know, this isn't really how young bull markets behave. If October was the low, this is a kind of an unusually mixed performance by the average stock. I would say, well, granted, that is true historically. On the other hand, it sure isn't how bear markets behave either. We haven't made a new low in nine months. You're well off of it, almost 20 percent higher. And we have the volatility just draining out of this market. That typically is not what happens if this is just a

very brief respite in a bear market. But we'll see. All right, Mike, thanks. We're just talking about tech and finance. What happens when you mix them? Well, today, shares of Coinbase falling off the cliff after the SEC sued the crypto exchange just one day after it brought charges against Binance. Up next, former SEC Chairman Jay Clayton weighs in on the crackdown on crypto industry, the implications, overtime's back in two. Coinbase shares falling today, turning in their worst day since March after the SEC filed a lawsuit alleging Coinbase violated rules requiring it to register as an exchange. This comes after yesterday's SEC action against crypto exchange Binance and its founder CZ.

SEC Chair Gary Gensler was on squawk on the street earlier today. Here he is discussing crypto businesses in general. This is a field that's built. The whole business model is built on noncompliance with the U.S. securities laws. And we're asking them to come into compliance. And they're going a bit of catch us if you can. Joining us now, Jay Clayton, former SEC chairman, a CNBC contributor. He's currently a senior policy advisor at Sullivan and C SEC chairman, a CNBC contributor. He's currently

a senior policy advisor at Sullivan and Cromwell, a law firm that represents Coinbase, and is an advisor at OneRiver, a digital asset management firm recently acquired by Coinbase. Jay, hey, Gensler is being pretty direct in what he's saying, and it seems a lot more dangerous right now to be betting on crypto capitalists than it is to be betting, say, just on Bitcoin. What does this moment mean? Look, I think Chair Gensler and I did watch the program this morning and appreciate the soundbite. I think that Chair Gensler did a good job articulating the commission's position around the trading, and let's go back to the issuance of securities, where they believe that what I would say is crypto entrepreneurs have tried to classify what are clearly securities in their view as non-securities. And the soundbite was about basically skipping

over the admittedly costly, but what I would say is proven to be effective securities laws around issuance and trading. So it was pretty clear that Chair Gensler believes that that definition of securities, and I was of the same view when I was at the SEC, is fairly broad, and that he believes that particularly issuers of these securities and the trading firms that support them have taken advantage of what I would say is non-regulation in order to distribute securities. I think that there are a lot of other people who are very experienced in securities laws who think that the chair's view is too broad. But what we have here are two different lawsuits. I would say that the Coinbase situation is much more about what is a security

and what is not, as opposed to the Binance situation, which is really about charges of fraud, commingling, commingling of funds and efforts to evade. Jay, this reminds me in some ways of the gig economy conversation from five, 10 years ago, where Uber was pushing for a new form of ride sharing, kind of a new form of employment. Taxi companies and cities were pushing back. And for a while, Uber was winning and gaining ground through unorthodox means. The crypto industry, to me, seems to have assumed a similar playbook of, hey, this is innovation that the forces of the status quo are going to fight it, but we're going to win. But the tide seems to be turning, no? Yeah, John, I agree. I think go back five years ago during the ICO craze,

something that the SEC cracked down upon, that was the pervasive view, that regulation was going to bend to innovation, that regulation in the financial markets was going to bend to innovation, that regulation in the financial markets was going to bend to the innovation and efficiencies brought by crypto. I think the mature view, including the mature view among many who are crypto proponents, is that that's not going to happen. I think what we have had is a narrowing of the debate as to what is a security, what is a commodity, what is something else. I'll note that at the same time we had these two lawsuits filed today, we had a hearing in the House Agricultural Committee where that was very much the issue. It was how do we classify different instruments

that do different things in a way that ensures investor protection, but also what I would say is facilitates what clearly a lot of people want. So, Jay, I think the difficulty then for investors is how do you value a company, a crypto company that came public perhaps under this idea that there was this revolution in finance where crypto was the future, right, and regulation would bend to innovation. Now it's clearly more nuanced. The conversation has turned to AI, has turned to mixed reality, et cetera. How do you value growth from here? I know that's not exactly your area, but is it a moderation of those growth expectations based on the reality of regulation and possibly new laws. Well, look, I think, John, you're asking a whole lot of questions, or I should say a whole lot of

factors in the question that you're asking. Crypto is a technology as much as it is a product. One of the questions that investors across the board, I'm not going to speak about any specific company, need to think about is, is crypto technology going to add an efficiency or add an advantage that they hope to reap the benefits of as an investor? Another thing that you're saying is, are crypto products, are they under regulatory scrutiny? Of course they are. We've known that for some period of time. And investing in the face of that uncertainty, that's what people do. I think a clear message that has come from everybody for a long time is this is not the place to put your assets that you are looking at as safe. This is an area where you're investing in uncertainty. But there are many smart people, John,

who believe that the technology continues to hold great promise. Well, I was threading the needle there, not asking you directly about Coinbase. Of course, Jay. I appreciate it, John. Jay Clayton. After the break, VC firm Sequoia

is breaking out its China and India units into independent companies as tensions rise between Washington and Beijing. We will discuss the decoupling with the CIO of CraneShares next. Welcome back to Overtime. Venture capital giant Sequoia is splitting into three independent firms with rising geopolitical tensions putting the pressure on. The U.S. and European units will continue to be known as Sequoia Capital, while the China and India arms will operate as separate businesses. Let's bring in Crane Shares Chief Investment Officer Brendan Ahern. Brendan, I want to get to the decoupling part, but first let's talk broadly about the

Chinese economy and markets. So the Central Bank of China, PBOC, over the past day cut deposit rates. There's a speculation that they're going to be required. Banks will be required to hold fewer reserves. All that could open up lending, goose the real estate market. What does that mean at this particular moment? Yeah, John, we've seen a bit of a slowdown in the economic rebound from some of the data in April and May. And I think, first and foremost, investors are getting a little anxious, a bit impatient. So we're seeing some policy response from the Chinese government, who otherwise have been willing to allow the economy come back incrementally, that Q1 is better than Q4, Q2

better than Q1. But again, I think investors are getting a little anxious and we're seeing some property support. And as you rightly mentioned, a cut in the deposit interest rate. And so this decoupling that we've seen happen, this separation between U.S. interest and Chinese interest, as the economies come under more pressure, does that process accelerate or is there more incentive for the U.S. and China to stick together? Well, certainly these economies are highly intertwined. And I think certainly decoupling is that train's already left the town. It's far, far too big of an economic repercussion for many great U.S. multinationals. If it's Apple, Nike, Starbucks, Boeing, ExxonMobil, et cetera, et cetera. So so hopefully you're seeing a part of the rally today that you saw on K-Web today was really driven by Secretary of State Blinken.

Rumors that he's going to be planning his trip back to China and we've seen some lower level meetings between U.S. and China. So you're seeing an improvement in the diplomatic relationship, a little bit of a thaw. Well, that's what I mean is because it seems like there is that incentive when the economy is slow. You feel like, well, maybe it's not so great to try to go it alone at this point. But then you see moves like Sequoia is making. We've seen Apple hedge its bets more with manufacturing in India. Are there still real risks for companies that have multi-nation exposure, particularly if you're a U.S. company in China or vice versa? Well, I think you're going to see U.S. multinationals, global multinationals create a China plus one strategy. They're not going to walk away from the second largest

economy. It's not just about manufacturing in China. It's about selling in China, as well as transporting goods across Asia, you know, 4 billion people in total. And that's why a lot of the factories are over there. There's 4 billion people there versus 400 million here. I think politically, you're seeing a little bit of a thaw because certainly these economies are so intertwined. The Biden administration has articulated the idea of a small yard with a high fence around critical technologies. And that is going to have an effect on private equity. Brendan, what is the AI effect when it comes to China? There's a lot of advanced process silicon manufacturing that doesn't happen

in China because companies don't want it stolen. And then there's the possibility that China won't get access to those most powerful chips that are necessary for AI. How does that play into what investors have to consider as they look at these geopolitical tensions? Well, certainly you're seeing a bit of an AI frenzy in U.S. equities, and we'd love to see that play out for some of the companies that we own within KWeb that do have a high orientation to AI. Companies like Badoo and Alibaba and Tencent are incorporating big data, chat GPT, particularly Badoo with their Ernie bot. But you're not seeing that enthusiasm on the China side. I think, you know, generally speaking, you're going to have low level access to semiconductors,

you know, things like Texas Instruments and others. They provide the chip that goes into your toaster. There's no problem with that. Certainly, there is going to be recognition awareness about very, very high-end chips that potentially could go into a military purpose. And that makes sense that it should be manufactured here in the United States. So you're going to see a bifurcation within semiconductors between the elite chips versus the mass market chips. Does that kneecap AI-driven Chinese software and perhaps parts of the K-Web? We don't see it happening to the K-Web companies, certainly because there's a lot of investment from China, right? They've created

this unreliable entity list. And that's where they're going to push money into trying to develop their own. Now, that's not going to happen overnight, as well as it's putting certain certain countries like a South Korean in a difficult position because if you ask South Korea which way do you want to go, that's very difficult for them, a little bit different than the Dutch and the Japanese. As well as I point out, you see certain countries that are basically a conduit for trade. And so Kazakhstan all of a sudden has become this huge exporter to Russia. And that's because a lot of stuff from Asia, from South Korea, Japan, India is going through Kazakhstan. Global perspective, Brendan Ahern, Crane Shares CIO. Thank you.

Time now for a CNBC News update. We're with Bertha Coombs. Bertha. Hey, John. A federal judge temporarily blocked portions of a new Florida law that bans transgender minors from receiving puberty blockers. The judge issued the preliminary injunction saying the state has no rational basis for denying the treatment of the three children whose parents brought the suit. Transgender medical treatment for minors is increasingly under attack in many states and has been subject to restrictions or outright bans. Last week's drone attack in Moscow appears to target the homes of Russian intelligence officers, according to sources familiar with the strikes. It's not clear whether any officers were hurt or if their homes were actually damaged. The drone assault was the first on a residential area in the capital since Russian forces launched an invasion of Ukraine. And two U.S. officials tell NBC News

Secretary of State Antony Blinken will travel to China in the coming weeks for talks. Previously planned trip was postponed following the discovery of a Chinese spy balloon flying over the U.S. There is still no word on the timing of Blinken's rescheduled trip. John, back over to you. Bertha, thank you. And up next, a headset reality check. I tried on some of the competition to Apple's new Vision Pro headset, including the MetaQuest, Sony's PlayStation VR 2, and the Magic Leap 2.

After the break, the CEO of Magic Leap joins us to talk about how Apple's entry into the field could impact her business. And don't forget, you can catch us on the go by following the Closing Bell Overtime podcast on your favorite podcast app. We'll be right back. Welcome back. The virtual and augmented reality headset race got a well-funded entrance yesterday. Apple and its Vision Pro. So how will the existing competitors respond? We've got one here now. Joining us is Magic Leap CEO, Peggy Johnson.

Peggy, welcome. So assuming this category takes off eventually, how do you end up being Android, not BlackBerry? Wow, that's a great question. First of all, I think it's not a zero-sum game at all. Just like in the early days of mobile phone, you're going to question. First of all, I think it's not a zero-sum game at all. Just like in the early days of mobile phone, you're going to see a lot of players in there, and you'll see people focusing on certain parts of it. Apple's focusing on consumer. Magic Leap's focusing on enterprise. And these devices will tune to the specific application or use case.

It's been remarkable, though, in the smartphone game, how Apple has made a lot more money with its App Store, a lot more margin on its phones, and practically nobody else except Samsung makes any money. It's kind of similar to the PC market. So you came out with the Magic Leap 2 about a year ago at $3,300. Apple's coming in with its Vision Pro at $3,500 early next year. How much do you have to pivot and adjust based on that big new competitor? Actually, all boats are rising.

With Apple coming in, we're going to see more developers who understand this medium, who can code in the 3D imagery that's needed for augmented reality and seeing actual images in 3D volumetric form. So that's a great thing for for us already in the space. Okay but can you still sell that for $3,300? We can in fact we can sell it for enterprise use cases who are saving money with this device. For instance training there's been an 80% reduction from several of our users in training costs. It's faster. It's more efficient.

You actually learn better when you can see things in 3D versus manuals on a table. But it's only a $200 difference, right? And they've got a whole lot of marketing power. How do you make this about, say, driving OpenXR, right, and making sure that people who are creating content for perhaps Apple's device can also use it on yours, and you do get that whole developer community impact? By staying very open. We have integrated already to Unreal, to Unity, to Microsoft's MRTK, to NVIDIA's Omniverse. We are as open as we can be. So it's come one, come all developers. Do you have to be cheaper and more efficient?

And I mean cheaper, more affordable and more efficient to Apple's premium plate in order to grow on the hardware side? I don't think so for the enterprise space. It's much, if you're, again, the ROI is quite a bit different from a consumer. You have a lot to overcome, which is great that Apple has seen those signal on the consumer side. We saw tracks in the enterprise space because we can save money for users. But why isn't the Vision Pro an enterprise device? They showed that beating heart, right, in their demo, which is similar to the use cases that you have in medical.

There is a difference in the technology. We are what's considered true augmented reality. You put our glasses on, you actually still see your physical world in front of you, and then we put digital content in. So pass-through devices, which is the type that Apple has, there can be a bit of a latency because they're actually imaging your physical world and showing that on a display in front of your eyes. You don't want any latency if you're in surgery.

You know, if you're having knee surgery and the doctor is looking down, you want them to see your knee. Right. Not a little bit of a gap. Apple says the R1 handles that latency issue, but I guess we'll have to try it on and see. When it comes to the adjustments that you'll have to make even at retail. Do you have the right partners already or are you going to make a change in how you go to market with your device ahead of next year, judging by how Apple is going to come out? We have the right partners in all of the categories that we're focused on, which are health care, industrial settings,

the public sector training for that. And largely, we can use their channels. As a small company, having those partnerships is critical and vital to our growth. You're a veteran of Microsoft and Qualcomm. Qualcomm, which supplies a lot of chips right into the competitors of Apple here. How fast do they have to move in order to supply this industry so that it doesn't get overwhelmed by this very well-funded, vertically integrated player? Well, first, I think they've got a good vision already. But these devices and this type of imagery needs a lot of compute. And so I think they're going to have to likely up their game more. Our devices are more like a, say, PC level compute than mobile phone compute. You're rendering a lot of imagery in

front of the user's eyes. You're going to do a consumer version now if consumers are willing to pay $3,000 for one of these things? I think Apple's entry into the consumer space certainly is going to accelerate our own consumer plans. All right. Well, we'll look forward to hearing more about that. Peggy, thanks for being here. Thank you for having me. All right. Still ahead, Needham analyst Laura Martin explains why she thinks Apple's mixed reality headset launch could lead to an acquisition of, yeah, Disney. Or maybe it should.

Well, first, Mike Santoli is going to look at what underwhelming flows into equity ETFs might mean for the market. We'll come right back. Welcome back. Let's get you caught up on some of today's after-hours earnings movers. Dave & Buster's is up in the extended session after first quarter earnings topped expectations. EPS of $1.45 was ahead of the $1.24 expected by the street. Same store sales for the restaurant chain fell 4% though, and revenues of $597 million were a tad short

of estimates. And Stitch Fix is higher after posting a narrower than expected loss, with revenues also topping estimates. However, the company's fourth quarter revenue outlook came in below expectations. Stitch Fix also says it will explore exiting the U.K. market this fiscal year due to macroeconomic environment and efforts to control costs. Stitch Fix has a market cap of just under $450 million at this point. Let's turn now back to Mike Santoli with a look at the recent market rally and the role retail investors have or haven't played. Mike. Yeah, John, not much of a rush by retail investors into equities, at least not through ETFs, which is the main mechanism. Take a look at this.

It's basically a rolling three-month total of inflows into equity ETS compiled by Strategas. And you see this rally this year has not been met by much of anything. Now, clearly, there was a binge on equity funds in, let's say, late 2020 through 2021. That's what all this is right here. So clearly we came into last year very heavily loaded with stocks on the retail side of things. That clearly was right in time for the market to go down more than 20 percent. And so you did have some conservatism built into investors' mindsets coming into this year. I think we really treat it more as a potential negative that is not sounding right now. Sometimes when you get a rally rolling for a little while, you see some overexcitement by the public to get in. You're starting to see some options flows and things

like that. But in terms of real money going into equity ETFs, we're not seeing that one just yet, John. And it's not because retail is running out of money. Well, no, exactly. It would seem to be pretty much they're happy to have more money in cash. The inflows into money market accounts is something like three quarters of a trillion dollars on a year to date basis. That's not all retail, but a lot of it is. And probably for good reason, because if you rebalance out of stocks, you're getting some income in money markets. But I think that, you know, you don't have to call the market, you know, overheated and overloved until you start to see greater participation on this front. And I guess that's what I mean is that you can do more with

cash than you could or you can get more from cash than you could for a long time. So do you have to factor that in when you consider this lack of ETF inflow? Perhaps. Yeah. It doesn't necessarily reflect the exact same psychology as it would have another time. So maybe people aren't that bearish. I've always viewed the ability to get safe yield off of cash like instruments right now as saying that it plays a role in a portfolio and actually allows you to assume more equity risk and it creates a cushion for you. So a lot of people probably are viewing it that way. And by the way, if you own an index fund, the S&P index fund, it's up 11, 12 percent year to date. That's getting your equity exposure higher without you having to add new money in this form. Tina's long gone. Yeah, Mike, thanks.

Up next, a top analyst who thinks Apple could buy Disney following the launch of its Vision Pro headset. Plus GameStop chairman Ryan Cohen has legions of retail investors following his every move. A new CNBC documentary gained access to this secretive community to find out why they became fascinated with Cohen in the first place and how he's affected their investments. So Ryan Cohen, I had started to learn about him through the GameStop communities and I started buying more GameStop because I liked what I had heard. He was a regular guy that became a billionaire. Well, why can't I do that too? He was supposed to be this great businessman who would make GameStop very profitable. He came across that he was on the side of retail investors. I think at the core of the GameStop movement, it was basically stick it to

the man. When I was originally a part of these communities, that was a big part of the sentiment. It wasn't just a bunch of people trying to get rich, and that's how I felt at the time. For a closer look inside the fanatic following of Ryan Cohen to and into making of The Meme King, tonight, 10 p.m. Eastern and Pacific. We'll be right back. Shares of Apple ending the day slightly in the red following yesterday's launch of the Vision Pro headset.

Part of that launch included a demonstration from Disney CEO Bob Iger showing Disney's content in augmented and virtual reality. Needham out with a note suggesting Apple should deepen that relationship and buy Disney in order to drive consumer adoption of the new headset. Laura Martin is the analyst behind that note. She joins us now. Laura, what would Apple be buying with Disney that it can't already get through partnership besides a fight with Governor DeSantis? So for sure, you can't actually force the Walt Disney company, unless you own it, to make content specifically for the Vision Pro headset or for Apple specifically. You have to do a third party deal. And if the creative content guys at Star Wars or at Pixar or at Marvel don't want to do it, they don't have to do it because Disney is all about making content that maximizes revenue streams to all of its content. If Apple owned it, it could say, look, we want exclusive content for the 100,000 units of $3,500. And it could actually drive penetration of that $3,500 headset by having exclusive Disney content

because they're the best storytellers on earth. Well, Laura, wouldn't that kind of be like if Apple had bought AT&T because it wanted to launch an iPhone? No, I don't think so, because content is really hard to manage teams. And there are established teams within the there's four established teams within the Walt Disney Company of the best creative teams available. And you can't build them. You have to buy them. OK, so tell me about Meta here. I have had concerns that I have voiced about the amount of money that Meta has been spending trying to create an ecosystem for virtual and augmented reality. And now in comes Apple. So does Meta have to stop subsidizing its hardware because Apple

doesn't appear to be? Or is this kind of a godsend for meta investors because maybe maybe meta ends ends up spending less on this. Yeah good question so the first thing we have to say is meta sort of popularize the metaverse and now no one's talking about the metaverse it's like not even a thing anymore so that's sort of a question of a bit makes it a bigger question about what's all that money at Meta being spent on. And then secondly, to exactly to your question, is Meta really wanted to become the next, you know, platform that could set rules and apps would be built on the platform using those Quest goggles. And now suddenly Apple comes in, it will bundle its platform, make it seamless work with the watch, with the HomePod, with the iPhone,

with the Mac. It will make all of those platforms work seamlessly so you can move from one to another, which is going to give it competitive advantage. And its hardware software integration means that it can be best practiced from day one. And I really like the innovation of the glasses. The glass they used is dark glass like tint tinted windows, where people in the room can see your eyes and you can see what's happening in the room. So if your kid picks, kicks you a soccer ball, you can see to hit it back. And metas do not do that. They take you into a virtual world

completely disassociated with human beings in the same room. So who are the arms dealers in this mixed reality race? Is it your unities, your app lovins? Is it your video game makers? Who's going to win no matter who wins? Well, I actually thought that was really interesting because the use case that Apple put up was Disney, like long form creative content. And of course, the meta unit is all about gaming, which has sort of been the, for VR, been the long-time consensus view is that it would be mostly used for video games. That is not Apple's view. I think Apple's view is much more widespread than that or much more diffuse. But with these platforms, with these new products they launched, they tend to show off what they can show off while developers are busy building the unique stuff.

It seems like it was that way with the watch. It was that way with the iPad somewhat. They might just be showing what they can show, right? Yeah. And they did interview a game maker and he said at launch, they're going to have that cool game. The guy that spoke in Japanese with the subtitles. So they will. And they did talk about a hundred games available at launch. So they just didn't stress it near as much as Meta's use case stretches, you know, emphasizes it for the medical for the quest. Do you think this is bad for anybody in particular? You talked about Meta, but aside from that? I think it's Apple trying to make sure that one of its platforms retains the default, maintains the default rules and app developers are developing for it, right? So

my guess is it's trying to keep all those iPhone app developers who are also developing the same app for the tablet. They want to make sure that developer also develops stuff for their goggles before they go into meta and develop stuff for those goggles. So I think it's particularly bad for meta. And then I don't know if it's good for the consumer or not. It's my view that the consumer adoption is not going to be high here other than early adopters at a $3,500 price point. I think it will take years to get that to a price point that could be mass adopted and they've got to fix the two-hour battery life.

That's ridiculous. Yeah. Well, two hours if you're out there in the wild walking around, but if you're in your living room and you're plugged in, you can go all day, of course. Laura Martin, bold call. Thank you. Thank you. Up next, the CEO of Doximity, which offers telehealth and networking for doctors on how his company's new AI tools will impact growth when we come back. Welcome back. Healthcare tech company Doximity offers networking, telehealth and scheduling tools for doctors.

It's hosting its inaugural investor day today. The company announcing it expects to hit more than a billion dollars in revenue by fiscal 2028, a compound annual growth rate of 20 percent. And it's pushing into AI. Best Doc.AI is an AI powered chat bot where doctors enter a diagnosis. The chat bot helps refer specialists. Joining us now, Doximity CEO Jeff Tangney. Jeff, welcome. So first, give me your sense of demand right now on your platform. You make money when doctors see, you know, pharma ads and other medical technology, perhaps, that wants to get in front of this audience. I think you've got well north of 70 percent of U.S. doctors. Is that market healthier again?

Yeah, well, thanks, John. Thanks for having us on. Yeah, just quick reminder, at Doximity, we're building the Physician Cloud, software tools that help doctors be more productive so they can provide better care for their patients. Today, we have over 80 percent of all U.S. physicians on our platform. And we announced today that we have over 40 percent of doctors who are on our enterprise subscription platform, which means their hospital or clinic is paying to use our telehealth and scheduling tools. Our overall market is recession resistant. So we're pleased to see that we've been able to show continued growth. We've doubled our revenue since our IPO here two years ago and tripled,

nearly tripled our profits.. So thankfully healthcare is doing pretty well but I will say doctors are very excited about AI right now. It's probably the hottest thing that we see as we listen to our physicians and what what they want more of. And why in particular are they excited about it? Is it about driving efficiency, less paperwork? I know you got this service that you also just announced where doctors don't have to wait on the phone when they're calling in prescriptions. What's the lure? Yes, it's about saving doctors time. I mean, the average physician works 62 hours a week in America and half of those hours, 30 of them, is spent on paperwork, bureaucracy. I mean,

they are fighting a bot war with insurers to get your prescriptions or procedures covered. And so what's been really a hit is our DocsGPT. It's a website that lets doctors fax letters to insurance companies using GPT to help them fill it out, whether it be a request for a procedure or for a needed medication. And it's been a real hit. It's used by a lot of doctors, and we've seen them save a lot of time. They think they can save about half of their what they call scut work time, cut the scut, which is about 14 hours a week. Okay, so tell me about labor market impact here.

I was talking to the CEOs of Medtronic and Boston Scientific recently. They were affected by the lack of employees, healthcare employees, in hospitals. They said that's easing. Does that eventually have an impact on you because the companies that want to get in front of doctors think they can actually make some money by getting these procedures done and these products moved? Yeah, so I'd say the overall labor market with physicians, it's tight. There's just not enough physicians in America to treat all the patients that we have.

So any time savings helps. And physicians are burned out. Seventy-eight percent of doctors say that they are burned out these days or have IT related burnout. So helping them do all that paperwork, helping them scribe the notes of their visits so that they don't have to spend 11 p.m. to midnight at home typing up their notes about each patient, we think really could go a long way to help easing some of that burden. But I do think that healthcare is one of the most documentation intensive industriesensive industries out there. And so as a result, it's probably one of the ones that can see one of the best efficiency gains from better scribes and AI tools.

How much harder is the upsell in this environment where customers really want to see the return on investment? I know you said that you're recession-resistant, but you're not macro-immune. Yeah, that's true. Our joke is that we're we're not immune, but we're vaccinated. And that's true. And again, I think our doubling of revenue and tripling of profit in the last two years, I think, speaks to that, shows that I will say getting to 40 percent of U.S. physicians on our enterprise platform has not been easy. But as we look at what's happening out there with hospitals and with pharma companies, we're seeing continued investment because I think health care is recession resistant.

What about Microsoft's move into this space with its acquisition a couple years ago? Is that good for you? Yeah, nuance. It's a great product that they have, and I do think it's good for us. Again, about half of the savings of time that doctors see would be from the voice transcription of patient visits. But the other half, it's all these letters that need to be written and sent. The need to send a note to a kid's teacher about their ADHD, all these letters. Well. And we can really help with those.

All right. Jeff Tangney, thank you. CEO of Doximity. Great. Thanks. And tomorrow, don't miss Overtime's exclusive interview with the CEO of Wolfspeed on the outlook for semiconductors. And for now, that's going to do it for overtime.

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