Closing Bell - Closing Bell Overtime: Succession Hints From Jamie Dimon At JPM Investor Day; Former Truist CEO On Current Regulatory Environment; Palo Alto Networks, Zoom Earnings 5/20/24

Episode Date: May 20, 2024

The Nasdaq notched a record close today while the S&P 500 fell just short of one. Kestra Investment’s Kara Murphy and Evans May Wealth’s Brooke May break down the market action. Earnings from Palo Alto Networks and Zoom. Barclays analyst Saket Kalia reacts to PANW’s Q3 numbers. Former Truist CEO Kelly King talks regulation in banking, movement at the regional level and what’s next for JPMorgan and Jamie Dimon. CyberArk CEO CEO Matt Cohen on today’s Venafi deal. 

Well, mixed session as the Dow inches back below 40,000, but the Nasdaq closing at a record high and the S&P just shy of one. That is the scorecard on Wall Street, but the action's just getting started. Welcome to Closing Bell Overtime. I'm Morgan Brennan with John Ford. Well, it's a big week for earnings, highlighted by NVIDIA on Wednesday. And the action kicks off this hour with results from Palo Alto Network's Zoom Video and Trip.com. We're going to bring you those numbers as we get them. And J.P. Morgan touching new highs early today. But weighing on the Dow later in the session,

following comments from CEO Jamie Dimon at the company's Investor Day, those shares finished down 4.5%. We're going to talk to former Truist CEO Kelly King about that move and his big picture take on the banks. But first, let's break down today's action with our market panel. Cara Murphy of Kestra Investment Management and Brooke May of Evans May Wealth. It's great to have you both here, especially as we do see this record on the NASDAQ, even as we're seeing the Dow take a breather. Cara, I'm going to start with you because we have seen this broadening out of the rally in general in recent sessions.

And as Mike Santoli was just noting a few moments ago, an incredible move in terms of the rebound that we saw from that April pullback. I think this is a very good sign and it's healthy for the market. So it's sort of been a slow story that over the last couple of months we've been seeing a broadening out, as you suggested, in the market. And in fact, if we go back just four weeks ago, we had about 65% of names in the S&P 500 running above their 200-day moving average. Today, that's running closer to 80%. And when we break it down by sector, in fact, within every sector, at least two-thirds of the individual names within those sectors are also running above their 200 day moving average. So this is all a good sign that it's not just the Magnificent 7 that's burning these gains. We're seeing other parts of the market participate as well. Yeah. And Brooke, I'm going to note here as we see stocks settle here

post-close, it does look like the S&P 500 closing at about 5308. This would be a new closing record for the SPX as well. Just want to get your thoughts on what drives the move higher from here if, in fact, the move is higher. We've got a 5600 to 5800 price target on the S&P by year end. And we don't think this year is a sell in May and go away. We think that we could see more upside momentum through the summer. And it's going to be driven by multiple expansion in addition to earnings. As Kara mentioned, we see a broadening of the market. And with more participation, we think that there's upside opportunity. Okay. And Kara, you are lowering your exposure to large caps in favor of mid-caps with a strong cash flow. And I'm curious about

infrastructure in particular, because you point that out as an area that has a low correlation to tech. So how are you picking stocks with that infrastructure theme? So I think as you start to move down cap, it becomes more important to lean into those quality factors. So whether you're in the mid cap or the small cap space, you want to make sure that the names that you're investing in have reliable cash flows, strong balance sheets. And so I think making sure that when you're picking within that universe, you have those factors exposed is really important. Then within infrastructure, you have some nice tailwinds in terms of more reasonable expectations moving forward,

more favorable regulatory environment. And then again, we still like tech. It's not that we're out of there, but it does provide a nice diversifier within a portfolio against tech holdings. Okay. And Brooke, you sort of take the other side of this one. You continue to believe in big tech leadership, caution against getting into small caps or really betting on sectors too much, but you like Amazon and Goldman. Let me ask you about the Goldman piece of that since we get the big tech Amazon piece. Goldman is an M&A story. CEO sentiment is improving. And as we see that shift, there's going to be more M&A activity and that's going to help Goldman. We've seen their advisory business have strong

earnings and M&A being a little light. And that we think will improve. They're not expensive. They're trading at about 1.2 times tangible book and 12 times forward earnings. So we think that this is still a great entry point into Goldman Sachs, even though it's rallied. OK. Cara, want to get your thoughts on fixed income here, given the fact that I realize you are overweight on equities. And in general, we have a market that's very risk-on. Yeah, for sure. So we do see more opportunities on the equity side. But we also think within fixed income, there's some great opportunities. In general, when you look at yields compared to where they've been over the last 10 years, they're way higher than where they have been. The exception is really in high yield. And so

that's the area where we would be more cautious. Number one, you're not really being paid to take risk in that area. Credit spreads are near historic lows. And so you want to be able to be picking from other areas like higher grade investment, where you can be able to have a little bit more yield and you have a little bit more faith that those companies are going to be able to pay their bills going forward. So Brooke, since you still believe in big tech leadership, how important is NVIDIA on Wednesday to that concept holding up? It's important. It's continued to lead the charge and we fully expect a great earnings report and the stock to continue higher. All right.

Kara, Brooke, thanks to you both. We're going to turn now to CNBC Senior Markets commentator Mike Santoli, who's taking a look overseas for today's market dashboard. Mike, what's over there? Well, near record highs, let's say, collectively for non-U.S. developed markets. And that's been a switch. Obviously, U.S. has outperformed vastly over recent years. This is the EFA. That's the MSCI IFA ETF, which basically is the index that covers almost all developed markets outside the states. You see, I think we just did nose above these levels from back in late 2021 into 2022. So this is still underperformed, but usually it's a good sign when you get global confirmation

of any move you're getting in terms of record. It shows you it's not just a one-off. It's not just about one sector like tech in the U.S. So you could sort of check that box off and say, okay, we have some global confirmation. Now, the U.S. dollar has had a somewhat interesting ride. A two-year look shows we're somewhat range-bound in terms of where

the U.S. dollar index has been trading. There was a time when, at the end of last year, everyone was sure of getting a lot of rate cuts from the Fed, and that's when you saw this plunge in the dollar. We've gone up from there, and there's sort of this little sort of mini uptrend that's been developing since then. It's pretty much a comfortable area almost no matter what, but it is something worth watching if you have all those foreign central banks, as now seems likely, going to get some rate cuts in before the Fed gets a chance to do it. Couldn't, in theory, put some upward pressure on the dollar. That's sort of a vague tightening of financial conditions. But, again, we were much higher back here at the peak of the Fed tightening cycle.

So, to me, you have some room before it starts to become a real challenge, John. Mike, does the concept of a geographical catch-up trade make sense given how well the U.S. has been doing relative to others, or just some markets are better than others? Well, I think in a very long-term basis, it makes some sense. But what it really is, is also a catch-up of sectors and styles. So there's more of a value commodity based orientation to foreign markets just because of the companies that make up those indexes. So it's really about a lot of things changing in terms of investor preference and not just about geography. But right now we are in an interesting moment where the U.S. arguably perhaps is going to be decelerating from very, very strong growth. And you have other parts of the world, certainly in China coming back to life and even in Europe coming out of recession,

where you have a little bit of a moment here where the rest of the world maybe is going to outgrow relative to previous expectations what the U.S. is doing. All right. We'll look far and wide, Mike. Thanks. Meantime, Palo Alto Network's earnings are out. The initial move is down. Julia Borsten has the numbers. Julia. Well, Palo Alto beating's earnings are out. The initial move is down. Julia Boorstin has the numbers. Julia. Well, Palo Alto beating on the top and bottom line. Revenues just a slight beat coming in at $1.98 billion versus the $1.97 billion estimated. Adjusted earnings of $1.32 per share were above the $1.25 that was estimated.

And Q4 guidance is in line. The company guiding to between $2.15 billion and $2.17 billion. That's right around the estimate of $2.16 billion. And EPS guidance of $1.40 to $1.42, it compares to the expectations of $1.41. So that guidance is right in line. The stock is down over 6% in after-hours trading now. Back over to you. All right.

But off the lows, Julia. Thanks. Meanwhile, don't miss Jim Cramer's exclusive interview with Palo Alto Network CEO Nikesh Arora. That's coming up at 6 p.m. on Mad Money. And after the break, much more reaction to all of today's after hours action. We're going to break down Palo Alto's quarter with an analyst who says the cybersecurity stock is a buy.

And speaking of cybersecurity, CyberArk making a deal to acquire machine identity firm Venify from Toma Bravo for more than $1.5 billion. We're going to talk to CyberArk CEO about that deal. And so much more. Overtime is back in two. Welcome back to Overtime. Zoom video earnings are out and Julia Boorstin has those numbers for us. Hi, Julia. Hey, Morgan. Zoom beating on the top and bottom line, reporting adjusted EPS of $1.35 per share versus estimates of $1.20. Revenues of $1.14 billion, just a hair ahead of estimates of $1.13 billion.

And Q2 revenue and adjusted EPS guidance is a bit lighter than anticipated. But the full year revenue outlook is basically in line. Earnings per share guidance a bit ahead, but not so impressive given this big beat in this first quarter. IUC shares down about 2%. Back over to you. All right, Julia, thanks. Some news now out of Microsoft's Build Developer Conference from the chips angle, Qualcomm announcing its Snapdragon X Elite and Plus platform coming to an initial wave of more than 20 laptops that ship next month, presenting a fresh challenge to Intel and AMD in PCs. Now, this launch comes with the debut of what Microsoft

is calling Co-Pilot Plus PCs, so a fresh take on the thin, light laptops that typically occupy the premium tier of a mobile PC lineup. Intel and AMD are going to have CoPilot Plus options, too. But Qualcomm's first out of the gate here, notable here, is that major developers like Adobe are supporting these new chips out of the gate. And the first batch of CoPilot Plus Surface laptops from Microsoft start at $1,000. These are ARM-based, so they're comparing them to Apple quite a bit. Yeah, this is going to be one to watch. We're going to be talking about this a lot this week between Microsoft and then you even have the Dell event as well, where they also are

unveiling their AI-enabled PCs powered by Qualcomm processors. It sort of speaks to, in a week where we also get NVIDIA earnings, this next potential chapter, I guess, of PC, AI-enabled PCs. And, well, their key question, consumers are actually going to buy them. Well, Dell's one of these major OEMs. And you're starting to get a, that Qualcomm's talking about here, you're starting to get a picture of what this AI PC stuff means. I mean, when you get Adobe saying, yeah, with Premiere, that's coming in June, Photoshop and Lightroom are going to be ready out of the gate.

Okay, we're really just talking about performance PCs with AI now being sort of the marquee buzzword that people are using for that. We'll see how the battery life shapes up and how Apple answers with its line of M-series chips, because they're comparing against the older version of that. Yeah, of course, what it's going to take to secure these machines, which we're going to talk about this hour, too. Yes, indeed. Well, shares of Palo Alto

falling in overtime. Let's see, down about 9 percent now, despite beating on the top and bottom lines moments ago. Joining us now on this earnings call and what's to come is Sackett of Barclays, who has an overweight rating on the stock. Sackett, you felt like Billings risk had sort of been dealt with. The Q4 billings guide seems to me to be right in the middle of expectations. So what gives here? Was it just trading at a range where people expected more of a beat? Yeah, thanks for having me on, John. That's right. We were at about 3% billings growth coming into the quarter. You know, from our conversations and some of our channel checks, I think the expectation was just a little bit higher maybe in in the mid

single digits but you know what i think is really interesting here to hear on the call john is uh the rpo metric right the remaining purchase obligations um that metric actually grew about 22 or 23 percent year-over-year which i think probably shows the bookings environment was okay so the question on the call is going to be whether there was any sort of change in duration or billings terms that maybe might explain the difference in that metric of billings versus RPO. The other metric that was really interesting here is their next gen security annually recurring revenue or ARR. That beat by a pretty healthy margin by about 100 million. And they're flowing that through to the year. So a couple of moving pieces to the print.

Of course, Billings is that main metric, and that was a little bit below what people were thinking. So with that in mind, taking a look at the year-to-date chart or a six-month chart, Palo Alto, with this after-hours level, is just about where it started the year. Given that you do think that Billings has been de-resked from here and the quarter looks solid, is this a healthy entry point, you think? You know, I think it might be. I mean, you have, we're going into the July quarter, which for Palo Alto Networks is their seasonally strongest. You know, from a portfolio perspective, you really have that NGS business that addresses some of the fastest growing areas in security whether it's sassy or cloud or or sim you know from a from a portfolio perspective this is really that security company i think is a little bit a little bit ahead in terms of in terms of exposure to those markets so um we're gonna have to get a

little bit of color just on on what uh uh what are some of the moving parts within billings. But listen, this is a core holding in our view in terms of a complete security platform. Yeah. Using the word platform here. Speaking of platformization, which we know was such a key part of the messiness we saw in the last earnings and something that the CEO of Palo Alto came on to talk to us about now that they've struck this deeper partnership with IBM on this show, came on to talk to us about it last week. How should investors think about that strategy and how it rolls out? And I guess the metrics, what you know, how to think about these metrics since we did did have this reset a couple of months ago.

Well, the acquisition. So, as you know, Palo Alto is acquiring the SaaS assets of IBM's QRadar business, which is actually the number three player in the SIM market. That's a market that's going through a lot of disruption right now. Really nuanced point there, Palo Alto is just acquiring the SaaS piece, but they will offer on-premise QRadar customers an upgrade path to their next-gen product, which is called XIM. And so there hasn't been a lot of disclosure yet just on sizing of the base or of the asset, as well as sort of purchase price. So that's going to be another talking point, I think, here on the call. But understand the strategy here in terms of buying a well-established kind of

SIM provider, but really giving them a path to something more next gen and something with a little bit more of a security focus. Okay. Quick last question for you. Are we going to see more consolidation across the cybersecurity sector? And I ask that as we have CyberArk's CEO getting ready to join us a little bit later this hour, and we have started to see an uptick in deal-making. Yeah, that's a good question. And Matt and the team at Cyborg did a great job, I think, with their proposed acquisition of Venify. So I know that'll be a fun conversation. Listen, I think that there's some security names here that are getting down to some really palatable valuations. So wouldn't be surprised to see a little bit of

an uptick in M&A. And we saw that on the back, you know, besides the, you know, the Palo IBM deal, you also had some consolidation on the private side in the SIM market. So, yeah, I think we've started to see a little bit of that, and I think it might continue. Okay. Thanks for joining us. I had the call. Thanks for having me. Shares of Palo Alto Network's now down about 9%. When we come back, JP Morgan dipping today as CEO Jamie Dimon weighed in on everything from buybacks to succession to regulation. At today's Investor Day, we're going to talk to former Truist CEO Kelly King about those comments and the broader landscape for banks.

And as we head to break, check out Norwegian Cruise Line Holdings floating to the top of the S&P 500 today after the company raised its full year guidance, citing strong demand and an improved outlook. See it up there. Seven and a half percent. We'll be right back. Cruising. Welcome back. Trump media earnings are out. Julia Borson has the numbers for us. Julia. That's right. The company reporting its quarterly results, but there's no analyst coverage of this company, so we don't have any comparisons versus expectations. The company reporting a net loss of $327.6 million, an adjusted EBITDA loss of $12.1 million, and saying that they have cash and cash equivalents of $274 million on hand. The company is saying in terms of revenue, it earned

$770,500 in revenue in the first quarter, saying that they believe they have sufficient working capital to fund operations for the foreseeable future. And as to that revenue number less than $1 million, saying, quote, at this early stage in the company's development, the Trump Media and Tech Group remains focused on long-term product development rather than quarterly revenue. We see the stock is pretty much flat on these results. Back over to you. Wow. Well, given that cash on hand number, all of that kind of puzzling. But we'll continue to follow it, Julia. Thanks. Well, check out J.P. Morgan's move today.

The stock closing down more than 4 percent after hitting an all time high earlier in the day. And that came after CEO Jamie Dimon said of the company's investor day, he's not planning to buy back a lot of stock with shares trading at current valuations. While he also hinted his retirement could be closer than ever. I guess it would have to be. Dimon also weighing in on the current regulatory environment with some harsh words for officials. Regulators should be telling you what they want the outcome to be. You know, they've already driven 80 percent of mortgages outside of the banking system. They're damaging America at this point.

The more we think the average mortgage costs 70 basis points more than it should because of bad, excessive securitization servicing requirements and origination requirements. Technically, my retirement is also closer than ever. Well, joining us now is Kelly King. He's a senior advisor to KSK Ventures and the former CEO of Truist Bank, as well as its predecessor, BB&T. Kelly, good to see you. So off of J.P. Morgan for a moment, I was kind of expecting to see more consolidation in regional banks right now. Maybe the fact that we haven't gotten more is a signal that the banking sector as a whole is healthier than many expected at this point. Well, John and Morgan, thanks for having me. Good to be with you. Yeah, well, I think if you take a long view, you should expect to see continued consolidation in the industry. The reason I think you're not seeing so much right at this very moment is there's still a settling down period after the pandemic and after the, you know, the reaction from the regulators and everybody's trying to figure out, you know, will mergers get approved and what level of mergers will be approved. So

all of that is fairly short term in nature. However, I believe if you take a long or even intermediate term view, John, you'll see a continuation of substantial consolidation in our industry because it's completely rational. Kelly, why aren't we getting more deposit flight from larger banks that aren't offering a lot in terms of interest rate on savings right now? It seems like in some circumstances, depositors are willing to move things around for a better deal. But so far, that reticence to do so is helping some banks. Yeah. And so it's important to think about the nature of depositors. You know, you have some depositors that are, you know, basically one product oriented. They may have a CD with a bank or a special purpose savings account. Then you have other clients

who have been with the bank for 30 years. They have all of their business with the bank. You have small businesses that do all of their business with the bank. And so their relationship is much more than the deposit levels. So those clients are very, quote unquote, sticky, as we call it. They don't tend to wake up in the morning and just move their deposits if they can get a 10 basis point improvement. So the fundamental funding structure of the banking system is really sound, stable. And that's why you've seen it resilience that

we've seen even in some challenging times. Kelly, it's great to have you on the show. I do want to go back to those comments that we just kicked off this discussion with from Diamond and specifically the fact we do have all this regulation on the table, some of it U.S.-centric, some of it a little bit more global. And the comments he made about the fact that we've already seen 80 percent of mortgages driven outside of the banking system, it casts a light on the so-called shadow banking system and what we've seen, whether it's non-bank mortgage lenders or other aspects of the private markets. And I realize I say that knowing there's some nuance here.

Private credit, for example, works with the banks on certain deals along the way. But how to think about these dynamics and how they continue to evolve as you do have a regulatory environment that's only really in an aggressive way affecting one part of this broader lending economy? So, Morgan, that's such an insightful question. If you go back to 1972, when I started my career, the banks and savings and loans, which many people don't even know what they were, at that time controlled about 80 percent of all the loans and deposits in the banking system.

Over time, we saw the shadow system, private credit system develop, and you saw a huge percentage of normal banking assets and deposits move away into private credit, into money market funds. And that has continued. It's ebbed and flowed. It got to a pretty high level as we headed into the Great Recession. And then we found out that when times get tough, people look at whether or not those funds are secured or protected. And, you know, looking back then, the regulators had to step in and support those areas of lending and depositing. And so we've seen that develop over time. It continues to be material. But here's the point. I think this is what you were alluding to. We need to pay more attention

to the private sector, the private funding, the private lending. There needs to be reasonable regulation and supervision over those areas. Having such a distinct separation between banks and those other areas, which are now a huge portion of the total financial market, is not rational. And I would say, with all due respect to my friends that are regulators, if they spend a little bit more time worrying about the private section and the charter banking system and trying to pile more regulation on banks, we'd be a lot better off. Kelly King, great to have you on the show. Thanks for joining us. Thank you. It's time now for CNBC News Update with Kate Rogers. Hi, Kate. Hi, Morgan. The United States and Saudi Arabia are close to a final deal on a bilateral

security agreement, according to the White House, National Security Advisor Jake Sullivan made significant progress in talks with Saudis over the weekend. The bilateral accord would call for a formal U.S. guarantee to defend Saudi Arabia, as well as restricting China's investment in the country. Supreme Court Justice Samuel Alito sold shares of beer giant Anheuser-Busch while as the brewer faced boycotts over its partnership with a transgender social media influencer. Alito purchased the same amount of Molson Coors stock on the same day. It comes as the Supreme Court recently adopted a code of conduct directing justices to refrain from political activity. The Supreme Court has yet to respond to CNBC. And the EPA issued an alert today urging water systems to take immediate action to protect the nation's drinking water,

as concerns over cyber attacks on utilities continue to increase. The alert said that 70 percent of utilities federal officials inspected violated standards put in place to prevent attacks, citing basic errors, including failing to change default passwords or cutting off access to former employees. Back over to you. All right. Kate Rogers, thank you. Thank you. Well, copper hitting its highest level ever today, now up more than 30 percent on the year, with gains accelerating in recent weeks. Up next, Mike Santoli brings three charts that could help explain what's behind the rally. And later, we are getting you set for a big week of retail earnings with names like Lowe's and Target getting set for results after Walmart's solid print last week.

We're going to talk to an analyst about the names he's watching when Overtime. Senior markets commentator Mike Santoli is back with us. He's taking a look at the electrifying rally in copper. And speaking of electric, Mike Santoli, your take. Wow, you might be overpromising on that last point, Morgan. But man, copper has broken out. It's got every chart reader's attention because of this aggressive move, especially recently. I would point out, you know, we've been not far from these prices all the way back in 2011, but there still seem to be some fundamental

supply demand issues that are driving it. So here over the last few months is how well it's matched up to what's gone on in the Chinese market. That's the FXI. That's the mainland Chinese stock market. So both have come back very, very aggressively. So clearly China buying, China rebuilding infrastructure there, part of that story. Maybe another part of that story, just a general building boom. We have data centers. We have all the chipsacked money. We have infrastructure. Take a look at copper alongside Vulcan Materials, which is a construction materials aggregates company, which has been one of the strongest areas of materials as well. So here you have a similar move on a on a one year basis. Those two assets. Now, I'll bring it back to the factory manufacturing

because factory construction, because it has been really unprecedented as how much this country is building in terms of manufacturing facilities relative to history. I mean, these are annualized numbers. There's your ramp. It takes a lot of stuff, as they say here, to make stuff. And that's all part of the story, as well as, Morgan, as you probably know, kind of a short squeeze in the New York market here. You had some people really having to scramble for physical supply. So we'll see if it's going to burn itself out or we have more to go.

I love these charts, Mike. And it is worth noting, to your point, the short squeeze and the fundamentals that you're seeing in the market play out right now because copper has swung to a deficit for this year. That had not been the expectation. That's in part because you saw some production come offline in South America. But I mean, we've had a number of folks on this show. I think about, you know, Richard Adkerson from Freeport-McMoran is just one example. The industry thinks that we're going to see a very stark supply shortage really starting in the second half of this decade and onward, in part because of what you just showed right here with the building and infrastructure and electrification boom.

I think the question is just exactly how price insensitive can builders and buyers of copper be longer term. As we know, in commodities, the cure for higher prices is higher prices. Look out for stories of people just hoarding and now looking for scrap copper and selling it. In 2011, that happened. Basically, there was a massive rush for people to just scavenge for scrap metals and sell it into the market. That's sometimes a sign that the public realizes maybe it's getting overdone. We haven't seen it yet. All right.

Mike Santoli, despite these market takes that are consistently electric, I respect you know how to stay grounded. I appreciate that. All right. Still ahead, a top analyst on how investors can cash in on the consumer ahead of a huge week of earnings for retailers like Macy's and Target. But first, the CEO of CyberArk on his new acquisition of machine identity firm Venify and the outlook for the cybersecurity industry. Stay with us.

Welcome back. Palo Alto Network's getting hit hard in overtime despite beating on both lines. Guidance was in line with estimates. That earnings call is now underway. Those shares are down about 9% right now. But in other cybersecurity news, CyberArk striking a deal to acquire machine identity management firm Venify from Toma Bravo for approximately $1.5 billion. The deal is expected to close in the second half of 2024. Joining us now exclusively, Cyborg CEO Matt Cohen. Matt, it's great to have you on. Walk me through this deal and why it makes sense right now and

how it speaks to this evolving threat landscape. Sure, Morgan. Thanks for having me back on. I think when we think about the world today, we see that organizations and, because identities are at the forefront of where the bad actors are focusing their attentions. Now, when we start to think about reimagining how we secure identities, it might be how we look at the workforce or IT, where CyberArk started. It might be in developers, but it's also increasingly in this area called machine identity. Machine identities can be bots, it can be applications, IoT devices, even modern code. And these machine identities are increasingly also on the forefront of how attackers are looking to gain footholds within organizations. Now, when we looked at Venify, they're the leader in what's called machine identity management.

And when you combine their solutions with our secrets management approach, our overall ability to bring an end-to-end machine identity security platform to market and make sure that the proliferation, the new number of machines are truly secured, this is an opportunity we couldn't pass on. Yeah, and certainly you've

said in the release that this is going to, you know, boost your addressable market dramatically. It's expected to add around $150 million in annual recurring revenue, be accretive immediately to your margins as well. How much is spending on cloud, as you lay out this machine identity thesis, how much is spending on cloud and AI driving this next phase where we're seeing in terms of consolidation and how businesses are going to spend their money on these cybersecurity threats? Yeah, I think that's spot on. So the money first shifts to cloud computing and to AI for innovation purposes to be able to accelerate the number of applications that are being developed. And then it becomes a factor of how do we protect? How do we protect those new applications as they come online? For us, the space of machine identity security is primarily about securing those new

innovations. So as organizations shift their spend to try to drive new development, they also need to shift their spend from a security perspective and development, they also need to shift their spend from a security perspective and how they protect those investments. And that's where this acquisition of Venify comes right in. Okay, Matt, further on that, Venify has a lot of customers in financial services. How is this acquisition going to change your opportunity there? Yeah, so CyberArk also has a rich history in financial services. And a lot of the more core security aspects of financial services, banking, were the first ones to really deploy the core security tools. So CyberArk or Ventify. So we see an ability to further penetrate, further be able to secure the big financial institutions around the world. You know, CyberArk and Ventify both are vendors for all of the majors around the U.S. and actually

around the world. But in addition, we see this now starting to proliferate into all industries, into healthcare, into retail, into industrials, where the attack vector is just continuing to increase. New threats, new paradigms are needed. This is where our idea of identity security comes in. Okay, particularly on infrastructure then. In machine-to-machine communications, we're just talking about how when it comes to water treatment, the security there, just basic password security, isn't too strong. How do you get those kinds of infrastructure industries to take security more seriously and adopt some of the technology that you have?

Yeah, I think those are areas that we're all worried about. I think it becomes making sure that we have an easy-to-deploy, easy-to-consume solution that can help them discover the identities, because a lot of organizations don't even understand the machine identities that are out there, then help them easily secure it. And then maybe most importantly, our ability to be able to manage and automate the lifecycle so that the operational overhead is brought down and these industries can continue to work in a productive manner. So for us, it's approaching those industries, telling the story and helping them understand

how we can make sure that those basic security controls are in place. We've been talking about consolidation coming into cybersecurity. And certainly a number of folks have pointed to this deal today to say, hey, this is an example of where we're headed. Just, I guess, if we take a step back, big picture view, do you expect we are going to see the competitive landscape consolidate and shift and evolve now more broadly? Yeah, so absolutely. So I'm down here at our Impact 2024 event. It's our customer event. We've got thousands of customers with us, and I'm engaged in dialogue after dialogue with CISOs and CIOs in the C-suite. And they're talking about finding trusted vendors, trusted partners like CyberArk,

and then bringing down the total number of tools. Now, they don't want one platform for everything. That's not really realistic. But within industries or within specific areas like identity security, they've been asking for, and now they're incredibly excited to see the ability to be able to consolidate tools across machine identity, human identity, and across identity security as a whole. Okay, Matt Cohen, CEO of CyberArk, thanks for joining us. Thanks for having me.

Well, Jeff Bezos is back in the business of minting private astronauts. As Blue Origin relaunched its space tourism flights after nearly two-year hiatus, we've got those details straight ahead. And speaking of out-of-this-world returns, check out shares of hims and hers health rallying after announcing it'll add compounded GLP-1 injections to its weight loss offerings. That stock has more than doubled this year.

We'll be right back. Welcome back. Let's get a check on some overtime movers. Zoom initially falling after its second quarter. Revenue earnings came in a bit light. Shares recovered a bit, still down fractionally. Also, Trump media out with the results this hour, reporting revenue of $770,500. It's up a bit. Checkout shares of Peloton falling hard, down about 5%.

Off the lows, though, it was down about 10. That's the company announced its refinancing debt, Morgan. All right. Well, Blue Origin, Jeff Bezos' space company, launched passengers past the edge of space yesterday. It's the first crewed New Shepard flight since 2022. Among the six-person crew, Captain Ed Dwight, who was selected by President Kennedy back in 1961 as the nation's first Black astronaut candidate, but had never actually gotten to travel to space. He finally reached it yesterday, age 90, making him the oldest passenger to travel to space, supplanting the title held by another Blue Origin passenger, William Shatner. He's a few weeks older.

Blue Origin's space tourism program had been on hiatus after the failure of an uncrewed test flight in September of 2022, and Sunday's flight wasn't without some complication as well. One of the three main parachutes did not fully inflate as the capsule made its ground landing. It is designed to safely land with two chutes, though. This launch marked Blue Origin's seventh crewed mission, 25th overall for New Shepard. Meantime, Virgin Galactic is due to launch its seventh commercial mission next month before pausing its suborbital program until 2026 to upgrade its fleet. And the timeline has, once again, slipped for Boeing's first crewed orbital mission

of Starliner to no sooner than this Saturday as Boeing continues to work to assess a helium leak in that spacecraft. So lots of human space flight missions afoot, John. Yeah, and that 90-year-old astronaut is spry. He doesn't look a day over 75. Up next, a top retail analyst on what he's expecting from a huge week of earnings, which begins tomorrow with Lowe's and Macy's. We'll be right back. Welcome back to Overtime. Investors will have a lot on their plate to digest tomorrow, including speeches from several members of the Fed

and Microsoft's Build Conference officially beginning. It will also be a big day for earnings. We will take the pulse of the consumer and consumer spending when retailers Lowe's, Macy's, AutoZone all report results before the bell. In Overtime, we're going to get numbers from Urban Outfitters as well as HomeBuilder, Toll Brothers. Of course, we've seen such a move in the HomeBuilders, Sean. All right.

Target reporting later this week as well, following strong results from Walmart. And joining us to preview that report and Lowe's is B of A Securities Senior Retail Analyst Robbie Ohms. He's got a buy rating on Target with a $190 price target and a buy rating on Lowe's with a $280 price target. Robbie, Target announcing today, I think it was, a wave of price cuts, which suggests to me that in this competition with Walmart, et cetera, margins are going to be pretty thin. They need demand. So why be excited here? Well, you know, the price target, sorry, the price, the lower price cuts, the price cut announcement came out today, but it's right in line with Target's strategy, which is entry-level price points. Remember, they had launched products like Figment in non-consumable categories

that are at really sharp price points to get a consumer into the stores that is challenged out there. Just quickly on gross margin, remember Target came into this quarter with very low inventory levels, very tight inventory levels with these lower price points. So that positions them well for gross margin upside when they report on Wednesday. But I do agree with you. I think the story for Target and for Lowe's

is not going to be one of sales upside in the first quarter. Yeah, and you can make the argument that we've seen that in general, not just this retail earning cycle, but even starting to see that in the last one. I am curious, though, Walmart was such a strong report, or at least so much stronger than the street had anticipated, that it sent not just shares of that company, but also Target and some of the dollar store retailers and others up in Sympathy. And it raises the question, how much read-through is there from Walmart to some of these other names? Or is this really just a standalone story for Walmart? Well, you know, I think, you know, it is a read-through. If you look at Sam's Club had a

terrific, you know know quarter as well in addition to Walmart us and it's a read through to the you know to the warehouse clubs and the discount stores they're all doing well in fact the only one that hasn't been doing as well has been Target they've been struggling with weaker same-store sales but we actually think Target is going to inflect a positive same-store sales in the second quarter. And we think on Wednesday they may talk about that a little, even if the first quarter same-store sales don't have upside versus expectations. Robbie, it seems to me like the major moat in this environment

where consumers really want those lower prices is a strong loyalty program that keeps that relationship sticky. What do you expect to hear from Target along those lines? Oh, I think they're going to highlight that announcement they had today, taking price down on 5,000 items. I think they're going to talk about figment and some of these other general merchandise and apparel categories where they've re-merchandised the stores to these very attractive price points, yet very high-quality goods.

And a lot of people forget Target has a world-class sourcing organization and capabilities to keep doing this. And they kind of set this up right into coming into these easy comparisons in the second quarter. So we think, you know, the story at Target continues to be the opportunity for an inflection in sales in the second quarter. All right, Robbie Ohms, thanks for joining us. Thanks for having me. Before we go, we've got news just crossing that the FDIC chair, Marty Grunberg, says he is prepared to step down once a successor is confirmed. This comes after allegations of harassment and misconduct within the agency. Democratic Senator Sherrod Brown had called today for President Biden to replace Grunberg. So we will continue to keep an eye on

that story. In the meantime, John, we can talk about retail earnings, and certainly those mean a lot, especially given some of the cracks we've seen in consumer-facing companies this earnings season. But really, NVIDIA is going to be the star of the show, arguably, in overtime on Wednesday, especially as we have all these AI events and announcements leading up to it. Possible major ripple effects. And in a day where the major indices didn't move that much, I think it's interesting that some semiconductor names did move quite a bit. Applied Materials was up more than 3.5%.

Marvell was up 3.5%. Lam Research up more than 3%, for example. But also, you know, we're talking a little bit about financials. Coinbase and Robinhood were also up pretty strongly today as Bitcoin shows health. And of course, NVIDIA is 20 percent of the SMH semiconductor ETF. So outsized moves in the semiconductor ETF, outsized moves in NVIDIA. There goes the market potentially. So we'll see how this plays out. In the meantime, that does it for us here at Overtime. Yeah, with a lot to look forward to this week. Fast money starts now.