Closing Bell - Closing Bell Overtime: Shutdown Countdown, Nike Earnings & Big Voices from UP.Summit 9/30/25

Episode Date: September 30, 2025

With a government shutdown looming, Emily Wilkins breaks down the latest from Washington. Malcolm Ethridge of Capital Area Planning Group and BTIG’s Jonathan Krinsky weigh in on the market setup, while Nike earnings take center stage with Oppenheimer analyst Brian Nagel. From Bentonville, AR, Morgan sits down with Walmart director and RZC Investments co-founder Steuart Walton, plus Sands Capital CEO Frank Sands, for exclusive conversations from the UP.Summit on investing, innovation, and what’s next. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

That bell marks the end of regulation. Snowflake. We're going to closing down from New York Stock Exchange, the pennant group doing the honors at the NASDAQ. A late turnaround for stocks to end a strong September. The Dow just getting into the green. Looks like that's going to be a record high gains for the NASDAQ in S&P 500, but the Russell still lower.

For the month, all the major averages closing higher, 5% for the NASDAQ, making it six straight up months for that, index five in a row for the other three. Healthcare, the best performing sector today, pharma names leading the way. Pfizer has a deal with the Trump administration to lower prices on some drugs. Merck and Pfizer have their best days since 2021. R. Aiman Jabbers reporting Eli Lilly also in negotiations and a similar deal could be on the way. Oil falling again, OPEC expected to increase production. It's now down 5% so far this week.

And another big day for gold. getting close to $3,900 an ounce, another all-time high, up 10% in September alone. That's the scorecard on Wall Street, but winters stay late. Welcome to closing about overtime. I'm John Ford. Coming up on overtime, we're about to get earnings from Nike. We're going to have those numbers and instant reaction, and we are bracing for what now seems to be a very likely government shutdown.

Only a few hours left to avoid it, and so far markets seem to be shrugging it off. But what if it lasts more than just a few days? First, let's bring in Morgan Brennan, way out in Arkansas. Hey, Morgan. Hey, John, that's right. So I'm here in Bentonville, Arkansas. This is home to Walmart, of course, but also to the Up Summit. This is 350-person conference.

It's invite-only, co-hosted by what you've called two American dynasties, the Walton and Perot families. This is a look into the future, particularly the future of mobility. So Sunday's Community Day, that's when this was open to the public. That drew 20,000 visitors to see planes, some dating back to. World War II, drones, flying taxis, commercial space stations, drag rates, air shows, Tesla's Optimus robot. There's even a bald eagle here on site. So there has been a flurry of announcements here, including FlexJEC's contract to buy 300 jets from auto aerospace.

This is one of the largest ever aircraft orders to an OEM in business aviation. As I mentioned, EVTALs are here. They have a big presence from Archer Aviation and Joby to beta technologies, which is right behind me. plans to go public via IPO. Earlier this week, recently announced an investment in a partnership with GE Aerospace as well. There's a fleet of Teslas, including cybercab, Volkswagen Scout trucks, not one, but multiple fusion energy startups. You've got next-gen shipbuilders, AI-enabled manufacturing, commercial space. The list goes on. But John, also, both the policymakers and the investors here to enable some of this sci-fi future to actually become reality.

And perhaps the most striking thing here is the fact that you are seeing it as reality. The hardware's here. So we have a big lineup of guests this hour to talk about that, starting with in just a few minutes, Stuart Walton, investor and board member from Walmart and one of the co-hosts of this event. And we are looking forward to that. Be right back out to you with that, Morgan. Meanwhile, markets closing this month and the quarter with some big gains, NASDAQ, up 10% in three months. But now there seem to be some cautionary concerns in the markets.

Let's bring in senior markets commentator Mike Santoli. Mike, historically, September's haven't always been this good. Yeah. Historically, it's one of the weaker months of the year. Even really beginning August 1st, sometimes the market kind of flattens out. When you have an index or a market that defies the seasonal tendencies, I think you do have to pay attention. and give the market credit for having some kind of underlying strength. The resilience has been more impressive, and it moves kind of the benefit of the doubt,

stays with the Bulls. On the other hand, you could look below the surface and start to see these sort of pockets of softness in there. Today, I was just mentioning financials and consumer cyclicals and consumer credit-related stocks, in particular, quite weak on the day. So either that was some kind of big kind of rejiggering of a portfolio at the end of the quarter or this idea that you're seeing this slow erosion in creditworthiness and some tiers of the economy is taking hold. For now, the AI story, I think we got over a little bit of the misgivings last week,

and now we're giving credit to the big players once again for just addressing this enormous and growing addressable market. How broad was the up move in the major indices this month, or how much of it was just a trading of leadership between some of the bigger names? It kind of depends which exact time frame you're looking at. You did have mega-cap dominate again, let's say, on a month-to-date basis. Small-caps had a nice run once we knew we were getting a Fed rate cut. In general, here you see the equal-weighted S&P has underperformed the NASDAQ 100 this month by more than four percentage points. So clearly, the latest burst higher has been a bit top-heavy. This is sometimes a warning sign and sometimes just the ebb and flow of the market.

You know, it's not as if it's a – the market's not a democracy. Not everybody has to vote in favor of going higher, but I do think you have to be aware that everyone is assuming we got soft enough labor data to get the Fed cutting rates, and then it's not going to come with any bad consequences because the economy is going to pick up again into next year, and we have the AI theme to play. It all could break perfectly that way, but I think you have to be aware that there's still a window for some doubt and some testing of that thesis, and without government data, it might be harder to test it. Caviot investor. Mike, talk to you again a little bit later. Now let's get the latest on the shutdown. The government's fiscal year ends in less than eight hours. Right now, there's no deal to fund it into next year. Our Emily Wilkins joins us now from Washington with the latest. Emily? Hey, John. Well, yeah, look, the question in D.C. right now is no longer will there be a shutdown, but how long a shutdown is going to be. The Senate is expected to vote this afternoon to continue current funding to November 21st.

But we're already hearing that that vote is expected to fall short of these 60 senators who will need to vote. Remember, seven to eight Democrats have to join Republicans. It doesn't seem like the numbers are there. And both sides have resorted to pointing fingers. Not sure if we have the sound there. It sounds like we weren't able to get. the sound going, I believe. Well, I'll just do a quick, very quick recap then.

President Trump basically saying that if there is a shutdown, there could be some irreversible damage. Basically putting that blame on Democrats. Remember, they were saying that there could be some firings, that a number of federal workers would be laid off. The Congressional Budget Office actually predicting that 750,000 federal workers will be furloughed and contractors as well will face losses.

And then, of course, Senator Chuck Schumer, Speaking from the Capitol, saying that that is all going to be on Trump's shoulders and on Republican shoulders, still asking Republicans to come to the table and make some sort of deal on those Affordable Care Act tax credits that are set to expire at the end of the year and raise insurance premiums for millions of Americans, something Republicans say they are more than happy to do, but they need to have those discussions after they go ahead and have this discussion about a shutdown. And so at this point, again, lots of questions about exactly how long a shutdown might last. Of course, you get to Friday. That means no jobs numbers.

You get further than that. That's going to impact data collection. That's going to impact a number of different programs. And that could potentially have a lot of various impacts throughout the economy. John? All right. Emily, thank you. It's a big deal.

So what does history tell us about how the markets perform during a government shutdown? How should investors position? In the meantime, let's ask our next guests, Capital Area Planning, group managing partner and CNBC contributor, Malcolm Etheridge, and BTIG chief market technician Jonathan Krenski. Guys, welcome. Malcolm, typically a government shutdown is something to shrug off or perhaps buy a temporary dip, but with the markets performing as well as they have in September and some of the stakes here, can we trust that playbook? Yeah, I think you framed it perfectly. Historically, markets tend to perform at least flat during government shutdowns, and they don't

tend to last very long. I think the longest on record was 35 days, and we just might be about to test that again, because I think this administration has already proven that it's willing to break with a lot of the norms that Congress tends to rely on, and so it is very possible that this one could have a lasting effect, which ultimately could be the thing, the catalyst to drive down a market that several analysts have already been calling for the last month or so that we might have been we might have gotten overheated in the markets and the AI trade specifically it might be time for it to start to fizzle out Jonathan what do you think about this because if history always

panned out pretty much as expected then we would have had a bad September or at least a middling one but September was really strong so should we trust history when it comes to or the impact on markets of the government shutdown yeah i think uh you know a lot of times when you have these known events uh context is important and the preceding market performance into the event is also important um and so oftentimes you actually get some weakness into the government shutdown in anticipation and that's why performance tends to be either decent or actually positive coming out or we didn't have that at all this time you mentioned not only was september um not weak like it often is but ahead of the shutdown, we had no pullback.

And so I think it could be a little bit different this time. But ultimately, you know, whether the government shuts us out or not, that's not part of our process. You know, there's a lot more things we're looking at right now. But, yeah, I think context is important when you think about how markets perform during and after a shutdown. Malcolm, we are about to enter literally hours away from Q4. And Mike Santoli was just mentioning some of the lingering concerns out there about consumer credit, we're not going to get the same kind of macro data that we're used to if the government does shut down. How much of a concern should that be for investors, given some of

the macro and global headwinds that could be perceived out there? Well, I don't know how much of a concern it should be. I'm going to agree with the context of your question that it probably should matter, but I don't think it really has simply because since April 9th lows, investors have really been focused on the AI trade once again. It's really been up to the mag seven plus a couple of friends to really do most of the heavy lifting. I know the financials have also done a great job of powering us to all-time highs too. But I think that that's really what the narrative, the narrative that's going to hold through Q4 and on. I think that as long as the AI trade continues to hold up, we saw Nvidia, for example, having great news through the

core weave story that ultimately looks like good news for them in Q3 and Q4. Those types of especially as we go into earning season are really what's going to make the difference. And I think regardless of what the consumer numbers look like, maybe even the job numbers look like, investors are really going to be looking for cues for whether the AI trade can continue to power on. Jonathan, what would you need to see in the charts to start raising concern for you about Q4? Well, I think, again, one of the things is the backdrop. The S&P has gone 105 trading days without testing its 50s.

50-day moving average. That's now the fourth longest since 1990. Once you get over 100 days, you know, the clock generally is ticking. But that just puts you on guard for maybe a three to four percent pullback, which we've seen in 18 of the last 20 years in the last five months of the year. So, you know, that I think is perfectly within the realm of possibilities. It would feel a little bit ugly just because we haven't had one in so long. But to us, you know, as we look into the fourth quarter and even in the next year, we've got to keep an eye on the consumer, really the consumer stocks. And there's a, you know, there's been different pockets throughout the last few months that's been showing weakness, but really the sustained weakness we've seen in restaurant

stocks, some of the retailers, even the hotels are rolling over, airlines have been softening a bit. So there's a lot of parts of the consumer-facing market that have not participated in the latest leg of this rally. And if they were to roll over further, you know, that would be a bit more concerning for the broad market, I think. You're watching. Jonathan, Malcolm. Thanks to you both. Morgan.

Well, John, coming up, we're waiting for Nike results. We'll have those numbers and some analyst reaction once they cross. But in the meantime, we are here in Bentonville, and we have to talk to a Walton. Stuart Walton. He's the Walmart director. He is a prolific investor through his own firm. He's also quite the pilot. He's going to join us right here next.

You don't want to miss it. Overtimes back in two. Welcome back to overtime. Check out shares of UiPath moving higher after separate deals with Open A.I. Invidia and Snowflake, though the details are different. The bottom line is UiPath is working with each company to integrate its platform with their products. Now let's send it over to Morgan at the UPS summit. Hold on.

We've got Nike earnings. Let's get to Sarah Eisen with those. Hi, we've got a double beat here, John, for Nike. First, earnings per share, a big beat, 49 cents. The estimate from analysts was 27 cents. Perhaps more importantly, Nike has returned to revenue growth, and this is a big surprise. They actually saw revenue growth of 1%. Revenues were $11.7 billion, and that was a lot better than the expectation of $10.9 billion. Remember, the company guided for mid-single-digit revenue declines, and that's what all the analysts were expecting, they were looking for signs of progress, and they got it in a much better way

by actually seeing 1% revenue growth. Now, it's lumpy. It's not across the board. Where is the growth coming from? Looks like North America was better than expected. The home market, up 4%. And again, that's better. It's where Nike has focused on this turnaround, and it is seeing results. Contrast that with Greater China, for instance, which is still declining the business, 9%, 10%, if you factor in the currency change there. So, On the headline here, Elliot Hill, the CEO of Nike, who was brought in to turn around the company. Long time Nike employee there has been there about a year now. He says the quarter, we drove progress through our win now actions.

That's been his turnaround strategy. In North America, specifically, he calls out wholesale and running. Those are three areas that he's focused on turning it around and it looks like they're seeing results there. He said, while we're getting wins under our belt, we still have work ahead to get to all sports, and channels on a similar path as we manage a dynamic operating environment. So they're pointing to three areas of strength, which is what drove these better results, John. And that is wholesale. That's the important relationships with the Dick's sporting goods.

And remember adding new relationships like Amazon and Eritzia, which they have done. Wholesale growth was looks like 7 percent. They still have work to do on the Nike direct and digital side of things, which is declining. The other area of progress I mentioned was running. There have been some good releases there with the PEG premium, the Vimero, which has done well. The Vimero premium shoe is coming out soon. And so it looks like they are seeing results of that.

I'm still areas for improvement. I mentioned China. Converse is another one where results are down 27 percent. They just announced new leadership there. So I'll continue to dig into this. We're going to be listening on the call, John, for guidance. They've been in this new mode of giving guidance for a quarterly. and not a long-term guidance because of the turnaround.

So we'll see if they continue to do that. And also if they update the billion-dollar hit, they were expecting from tariffs now that we're starting to see some trade deals materialize. Okay. Sarah Eisen, thank you. I'll pick it up from here. As I mentioned before, I'm in Bentonville, Arkansas, where Walmart was founded by the Walton family. The family, which still owns about 45% of the company,

has taken it from a small-town retailer to the largest private employer here in the U.S., one of the largest in the world. Our next guest sits on the board of Walmart. He has been a crucial part of the company's next leg of growth, but he's also made quite the name for himself in the venture capital world and beyond joining me now exclusively Stuart Walton. He is founder and chairman of RZC Investments, and as I mentioned, sits on the Walmart board,

and it's great to be speaking with you today. Likewise, great to be here. And of course, you are one of the co-hosts of Upsomit. So I guess maybe we just start here with the significance of this event. Well, we're excited that this is, I think, our fifth Upsummit here in Bittenville. It started a little bit rag-tag back in 2018. and it's really turned into something special. We kind of almost started as like a flying car summit, believe it or not.

And that is a little bit ahead of its time. We had no flying cars at the time, but as, well, here comes a helicopter as we see, but as the events progressed, the technology's progressed along with it and the relevance of that technology to all these other areas that you see behind me now, such as defense, energy, technology, even education, things like that are being discussed here at the summit. And a summit like this doesn't really happen without vision. And Bittenville doesn't really happen without vision.

Walmart doesn't really happen without vision. It's one of the things that's most interesting to me is how you create something somewhere where otherwise it wouldn't be or wouldn't develop naturally. And I feel like all three of those examples, whether it's Walmart, whether it's what happening in Bentonville, or whether it's what happening here at the Ups Summit are examples where vision, hard work, and energy

come together to create something special that wouldn't exist without a lot of intentional effort and purpose and passion to kind of fuel it all. So that's kind of what the Upsummit represents to me. It's just another good example of this, and it's fun to do it right here in Bentonville. So what are some of the technologies and capabilities here that you are most excited about? To me, I think, gosh, I heard a panel with Governor Glenn Yonkin today and Commonwealth Fusion. And believe it or not, they met last year at the Upsummit, and they are progressing. this idea of fusion power. Everybody used to always say fusion power was 30 years away,

and now it looks like it's about 30 months away. Which is wild. It's wild. And it's absolutely an unlock for the country, for defense purposes, for AI purposes and data centers, and just for lowering cost, improving the cleanliness of electricity around the United States and hopefully around the globe. But that's just one piece of the technology that we're hearing about. Beta Technologies is another one that I've been following for a long time. We invested in them back at the very first UPS summit, and they just announced this morning they're going public.

They're an electric V-TOL aircraft and making tremendous strides, both with defense contracts, transportation contracts, and looking to move people here in the next few years as well. So that's another technology and company that I'm particularly passionate about. They've been a great supporter and participant at Upsummit for the last, I think since in every single time, since in every single one and we're excited to see them here and I was thrilled to see that they're actually going to start the process of going public. Yeah, re-industrialization or maybe we call it industrialization 2.0. It seems to be on the cusp of becoming a reality. So how are you thinking about that as an investor when we do talk about

things like dual-use technologies? Well, I'm I am a co-founder of a manufacturing business right here on the airport. We build airplanes, soup to nuts, composite airplanes. It's an aerobatic airplane that we build today. We've delivered about 115 of them to customers all over the world. And we're in the process of developing our firefighting aircraft, a couple years out from certification, we hope. It'll be a real step change in the sort of type of aircraft, the volume of aircraft that we're going to be producing here.

So I'm really passionate about manufacturing in general, passionate about aviation, and this whole movement around re-industrializing it, manufacturing, reshoring, manufacturing, strengthening America's, you know, just overall manufacturing capabilities is really something I've been passionate about for a long time. We were ahead of the curve starting the company back in 2013 and to see the ground swell of support with this administration, but also that's been happening longer than that over the last

probably five plus years in the United States. The importance of that is just critical and I'm happy to play a small role in it and like to learn as much as I can about manufacturing in general. So manufacturing, mobility, how do you think about it not only as an investor, but as a member of the board of Walmart and the future of what that means for the future of that company? I don't know if there's any company that moves more goods, more places to more people than we do. And so transportation is essential. Walmart's logistics are famous, both for their scale, but also the volume and the variety. This morning we just announced, I don't think that's all.

Walmart package, but this morning Walmart just announced two things that was very exciting to hear. They're expanding their partnership with Wing, which is owned by Google, and they also announced they're expanding that partnership to come to Northwest Arkansas. I was talking to a couple of our leaders at Walmart this morning. They said in January, we'd done 100,000 drone deliveries to customers, and by August we'd done 300,000. So we're scaling that up. We're starting to hit the J-curve there, and we are really excited about drone delivery as a big component of solving last-mile delivery to customers for Walmart. It's just a huge part of their business.

It's a huge part of our long-term strategy is getting customers things as quickly as we can, and it's less than an hour now from a lot of our stores, and drones should be able to help supplement that even more. Wow, and of course I think it speaks to the fact that under the hood, Walmart, yes, it's retailer, huge retailer, but it's also a technology company. Doug McMillan, the CEO of Walmart just a couple days ago, basically made it on paraphrasing, but he said that there's essentially no job that's not going to be touched by AI.

So how are you thinking about that, especially as you also look to stand up higher education and rethink that? Well, we are launching a STEM school here in Bentonville. We announced it back at the Heartland Summit in May. It'll be focused on applied STEM and applied AI. And we want to be helping to create and develop the workforce of the future right here in town. It's actually, I think, quite cool that it's going to be located on the old Walmart campus. With respect to AI, I mean, I think Doug's right.

I think it will change every job in a meaningful way. I think it will also, I'm an optimist when it comes to this. So I don't think it will replace, you know, I don't think we'll have mass joblessness. I think it will just make people more effective. It will automate things that people don't like to do, get people opportunity to do things that they want to spend more time on. And I'm quite confident that the AI opportunity is going to be a huge net positive for society. And finally, there's been an air show here the last couple of days. As I mentioned, before the break, you are a pilot yourself. So I think maybe we have some video of that. We'll see if we can

pull it up. But just wanted to get your thoughts on that as well. I think the air show is a fun and critical part of the UPS summit. It gives people a reason to come out. But it also plays it a key role in connecting this summit with the community. So we have a community day here at the UPS summit where we had 20,000 people come out to the airport. I think it was an all-time record and flew the air show for them. I'm delighted to be able to do that and participate in it. It's a passion of mine.

I was able to fly a very special airplane, a F2G-1 Corsair, called the Super Corsair. And it's the only one flying. People love to come out and see it fly. We've got great support for the community, from the community of the airport here. And a lot of it has to do with the way that we engage with the community and invite them to the airport. It's a public space. Yeah.

It's very important. They feel like it's theirs. I mean, it's been so cool to watch here the last couple of days. So thank you for having us. Stuart Walton. Appreciate it. Thank you so much. It's a privilege.

John, I'll send it back to you in studio. All right. Great stuff. Well, Electronic Arts is going private. largest leveraged buyout ever are more coming. Will lower interest rates mean more mega deals? That's next on Overtime. Welcome back to Overtime. Shares of CoreWeave, a big winner, up nearly 12% after signing a $14 billion deal with META for AI cloud infrastructure. This adds to what's already been a good month for CoreWeave, up 30%.

And the stock is nearly $100 a share above where it went public back in March. Now, we've seen a wave of IPO so far this year. Aren't we about to see an M&A increase as well? Our list of Picker is looking at some of the reasons why there could be more mega deals. Mega deals has certainly been the trend of the year. In recent years, though, a really big missing piece to the M&A equation has been buyouts. Yesterday's $55 billion take private of electronic arts may be a signal that that is changing. The deal for the video game maker now stands as the largest leveraged buyout ever.

PE-backed transactions valued at more than a billion dollars have been comprising a bigger and bigger proportion, nearly half of the buyout market this year, and that's up from about a quarter of such deals five years ago. There are a few reasons why bigger is becoming more appealing in the current environment. For one, private equity firms are sitting on historic levels of dry powder. There's also a sense that bigger companies or better bets when it comes to macro uncertainties out there, whether it's pricing power amid inflation or reorienting supply chains or investing in technology and AI. Also, financing markets are very accommodative to large LBOs right now with new issue spreads at their lowest levels since before the crisis, according to Pitchbook. But track records for mega LBOs of years past are mixed and especially dire for those that have been, quote, the largest of. of ever of their time. Think TXU in 2007 and RJR. Nabisco in 1989, we know how those two

turned out. For more on what's going on in the private equity industry, check out Inside Altz at the QR code on your screen there. John? It seems like we have these cycles of take them private, break them up, bring them public again. Are we entering perhaps another leg of that kind of cycle? It certainly feels that way. And with rates coming down, of course, that makes financing for these types of deals cheaper as well. We're seeing bigger deals in both the strategic market with company-to-company transactions as well as the sponsor-backed market, the private equity buyouts that we just outlined. So bigger is definitely the appeal here. So you're seeing transaction values grow this year, especially since the last few years as rates

remained higher. There weren't, you know, there was a pretty big dearth of M&A activity. That is changing. But the number of deals still remains low. That's actually declined. So it's kind of tilted toward these bigger deals, you know, for the reasons that we outlined, whereas the number of deals are smaller. But, of course, if you're an M&A banker, you get paid on the transaction value. So it's still fine for you. A good deal if you can get it. Exactly.

And tilted toward bigger, just like the public markets. Exactly. Thanks. Well, it's time for a CNBC News update with Courtney Reagan. Courtney. Hi, John. The Trump administration will reportedly defund a watchdog group for 72 Inspectors General. According to the Washington Post, the group told how since then it

committees in a letter that without funding, it would have to furlough 25 employees and end its mandated functions starting tomorrow. A federal judge temporarily blocked the Trump administration from cutting $233 million in counterterrorism grants for 11 Democratic-led states, including New York and Illinois. On Monday, the state sued the administration over last-minute changes made to the grants. They argued the president was retaliating against them by redirecting the funds away from them. And after 19 years of marriage, Oscar-winning actress Nicole Kidman filed for divorce from Grammy-winning country singer Keith Urban today in Nashville. According to the filing, Kidman said the marriage quote suffered irreconcilable differences. Kidman and Urban, both of Hume,

were raised in Australia, met in 2005, and married the following year. John, back to you. Courtney, thank you. Well, Nike is now up about 1% after being up closer to 3 in overtime, its results. Coming up, analyst's reaction to its numbers, they look good on the surface. So why does the stock give back some of that initial gain? Overtime, we'll be right back. Welcome back to Overtime. Nike reporting earnings moments ago. Shares moved higher by about three plus percent at the peak after the company reported a surprise sales growth, but it's lost some of those gains, now up about one and a half percent. Stock was the worst performing Dow. this month. Joining us now is Brian Nagel from Oppenheimer. Brian, you pay more attention here

to the revenue or to other things. Oh, good afternoon. No, look, this was a clear beat by Nike. And I think just like you're saying, John, I think the revenue is important here. Because that's really been the missing piece. Sales have been a week of Nike for a while. And what we learned here just a few minutes ago in the recent quarter, your sales were, and we still not up to Nike standards, but significantly better than they've been. And if you look through that, that P&L, you know, gross margins were not as weak and they did a nice job control and expenses. But, you know, the revenue beat, particularly wholesale, was definitely notable. So what is the narrative that is building here with these numbers that you just got?

And then what's the potential counter narrative negative that could derail that still? Well, the narrative, and look, I'm very much a bull on Nike, so this is my narrative as well, is that this under new management, Nike is reinvigorated, and it'll take time. where we're seeing the company much more focused on product innovation, much more focused on its legacies in sports, and re-engaging with wholesale partners. And again, like I said, that's going to take time. This is a big company.

But I would say over the next several quarters, we're going to see more and more progress towards Nike basically reinvigorating itself. Now, the naysayers, you know, the other side of the argument is that Nike's lost its way. You know, the doldrums of Nike in the last few years have allowed other competitors to come in. and the competitive landscape is now too difficult for Nike. You've got a difficult backflow backdrop. China's not cooperating. We don't know what's happening with tariffs.

But again, in my view, Nike's going to plow through this, and we will see a reinvigoration of the company over time. How much of a thorn in Nike side could China be, given that? I mean, we've been doing a lot of reporting here from our Eunice Yun on the difficult economy out there. And you sort of never know what consumers in China see as a bargain and are willing to spend on in this environment? Well, look, it's a good question. So if you look at the numbers now, you know, China is still relatively small for Nike.

You know, this is a global company, obviously, with a huge business in the United States. So China's relatively small. I think where China becomes more important is, you know, if I'm right, and we see this reinvigoration of Nike of the next several quarters, the stock gets a higher multiple. And investors at that point start asking, okay, what's next? That's when China's important. And I think a lot of consumer companies still look at China as a, you know, largely untapped or at least uncapitalized upon consumer market. But right now, as long as China doesn't get significantly worse and the other parts of Nike's business get better, I think that'll be good enough.

All right, Nike stock here in overtime, looking like it's making a run at trying to regain some of that pop. Brian Nagel, thank you. Now we've got breaking news from the White House on a potential deal with Harvard University. Amen Javvers has that story. Amen. John, the president is speaking in the Oval Office at an unrelated event, and he just said that he is close to finalizing a deal with Harvard University. The details that the president offered in the Oval were that the university would contribute $500 million to a fund which would create trade schools around the country for educating people in different fields. We don't have any confirmation here from Harvard. We're going to reach out to them to see what they have to say about this.

And the president saying that this deal was close to being finalized. And if it was, then all of Harvard's sins would be forgiven. The president and Harvard University have been locked into battle for much of the year. The president accusing Harvard of allowing anti-Semitism to run unchecked on campus. The university has been defending itself, saying that the administration is trying to push into Harvard's First Amendment rights and the rights of academic freedom. That tussle has been in a tense negotiation for months. months now, the president's signaling here in the Oval Office that that fight might be coming to an end, but we'll have to wait to get confirmation if this deal actually gets across the finish

line and see what Harvard has to say about it, of course, John. Back over to you. All right, I'll actually take it, Amon. Amin Jabbers in Washington. Thank you. Well, up next, we are diving deeper into aerospace and defense. Sands Capital CEO and Chief Investment Officer Frank Sands on where he sees the biggest opportunities right now in those fast-growing industries and more on the other side of this break. Stay with us. Welcome back to Overtime. We're here in Bentonville, Arkansas at the Ups Summit

where investors, founders, corporate leaders, our focus and policymakers are focused on the future of transportation, mobility, aerospace, really just innovation. So joining me here is Frank Sands. He's Sands Capital, CEO and CIO. Sands has over 50, billion dollars in assets under management and it's great to be speaking with you today great to be here

morgan thank you so before the break we tease this as a deeper dive into aerospace and defense so i think maybe we start there and why you're here at the up summit okay well this is a fantastic event and you know we've got wonderful hosts here and i do want to thank them steward tom walton philip sarah from ross perot and of course cyrus sigari and the up partners people they're put on a fantastic event You know, SANS Capital has always been investors in innovation. We invest in large public companies and go all the way starting with early stage venture businesses. Looking at cyber, artificial intelligence. We also do a lot of work in life sciences, therapeutics, diagnostics, and medical devices,

and then later stage companies in defense and artificial intelligence in other areas. Yeah. Of course, one of the things has been coming up at this conference, And I think it's been a bigger conversation among investors in general has been this idea of dual-use technologies. So how are you thinking about that? And what does that mean in terms of some of your investments, either in public or private markets?

Well, you know, the reason we're here at the Upsummit is to really dive deeper into the critical areas of space and defense tech sectors. You know, of course, in space, the cost of launch has dropped by 20X in the last 15 years, obviously led by SpaceX, which intends to, I guess, lower it again, another. 15X, and that is enabling a lot more satellites, people, and things to go into space. Satellites, of course, are getting a lot cheaper to put into space, and so we're expecting in the next two decades there'll be a lot of innovation there, things such as obviously global broadband, beyond just Starlink, what's called on-orbit manufacturing in areas such

as fiber optics, semiconductors, pharmaceuticals, and maybe even mining. So we're looking at all those areas and expecting quite a lot of growth. Right now we're doing a lot of work in the infrastructure areas. So it would be the satellites and the rockets and hypersonics that put things into space. Yeah, and of course space has a big presence here too. I mean, we've got a commercial space station mockup with VAST right down the way over here. And we've got satellites, Sesea Mastro, for example, right behind us, hypersonics too. How does AI fit into your broader investment thesis right now?

Well, of course, AI is in almost everything that we're doing. I mean, AI is going to be something that, you know, every company does in future years. AI is a big part in defense tech. You know, in defense tech, it has been a few concentrated primes that we're doing cost plus contracts to make exquisite systems really hardware heavy. That is now shifting to a number of more entrepreneurial numbers. nimble primes that are focusing on innovating very particular tech stacks and doing things on a fixed price with performance systems and in that you know the

leader there would be a company such as andrel which is using AI but essentially using autonomous systems with sensors that can alert and then use AI to sort out and then respond to different events but AI is something that'll be you know pretty much in everything. Yeah, and of course we've got everything from fusion energy here to defense tech and commercial space, as you just mentioned, and then the fact that Sands Capital is invested in private equity, public equity, and in venture as well. So the public piece of this, there's been some debate and some conversation recently about whether the AI infrastructure build out right now is getting bubbly. How do you see it?

We're clearly in an AI boom, absolutely no doubt. You know, the question is, is what we get into an AI bust, and if we do, you know, when and how will that happen? You know, right now in all the work that we're doing, the spending for 26 looks very solid, you know. The question will be what happens in 27, and that's something we'll learn in the next couple of quarters. There's no doubt that companies like Open AI and Anthropic are in hypergrowth, you know, triple-digit revenue growth. And of course, they're bringing out new products and services, and it seems like announcing pretty major partnerships almost every day. And, you know, what's happening in AI is a lot bigger than the internet boom of the 90s. You hear a lot about how people are

feeling anxious that they're going to be replaced by AI. Well, of course, there's businesses and companies feeling the same way, and there are nation states feeling that way. So there's an enormous imperative that is driving a lot of spending, and that's what we're seeing with the hyperscalers. That's where we're seeing with a lot of the nation states. Of course, That's what Justin Wong at Navidia is using when he's going around the world to sell his wares, is that if you're not investing dramatically in AI, you're going to be left behind and you may be out of, you may never catch up. Yeah. Frank Sands, it's great to speak with you here at the Upp Summit.

Thank you. Thank you so much, Morgan. John, I'll send it back to you. All right. Morgan, thank you. Well, up next, Mike Santoli is going to look at the big split between consumer sentiment and the equity allocations of retail investors. Is it a red flag for the market?

And as we had to break, here are some of the notable stocks hitting all-time highs today. InVIDIA, Lamb, Research, Western Digital, and Defense Contractors General Dynamics, and L3 Harris. We'll be right back. Welcome back to overtime. The market might be sending a signal

about what's really driving growth right now and what's not. Senior markets commentator Mike Santoli, revisiting a long-term relationship that might offer some clues about where the cycle is headed. Yeah, so John, corporate Cappex, obviously, especially in AI, has really been a driver on an economic level as well as the market. So this is the percentage of equity market cap that's sort of represented by projected Cappex by the top 10 biggest Cappex spenders in the market.

The key is, look how much greater it is than it was back in the Internet boom, right, peaking in the late 2000. So just the emphasis on this corporate spend and what it means for the overall economy and earnings as it moves through the food chain. Today was a great example. Invidia was up. A majority of stocks were down. We had a positive day in the index. Now, on the consumer side, you're seeing a lot of fraying around the edges. So take a look at how consumer sentiment, this is from the University of Michigan survey, and that is the orange line here, has really flagged relative to individual investors' equity allocations. So there's totally separate surveys.

But individual investors are kind of fully invested, even if they say they're nervous about the market. So it's this kind of capital over labor type of question. And it's corporate over consumer, at least in this phase. The question is, can this remain in tension for a while? Is it going to kind of undercut the longer term growth story? Or maybe is it just sort of papering over this phase until consumers and households can find their traction again? If we can go back to the first chart, let me try to layer my tech sense, such as it is on top of your great data, it seems like the big difference to me between 2025 and 2000 is that now we have

compute as a utility. Back in 2000, it wasn't necessarily the biggest companies that were buying so much of the hardware. But now the biggest companies are trying to act as providers of compute to the entire global economy and not just compute, but also intelligence and virtual workers. And we don't know economically how that's going to play out. It is very true because back then what you actually had was like the telecom companies and some upstart fiber companies that were trying to build out the broadband network and, of course, buying the networking equipment. But it wasn't the absolute largest companies and cap expenders out there. I don't know if that makes a difference long term. Obviously, it's all about the sustained demand for whatever intelligence is created.

And I think there's a lot of confidence being expressed by these companies that it's going to be there as long as it's not just out of defense, that it's also out of opportunity. Strong month of September, so much of it driven by the biggest companies and these AI names. And this has given me a different way of thinking about the bet that the biggest companies are going to provide so much potentially to the global economy. Mike, thanks. That's going to do it for overtime. Fast money starts now.