Closing Bell - Closing Bell Overtime: Tariffs Decision Fallout; Goldman’s Tech Earnings Takeaways & Retail Reaction 5/29/25

Episode Date: May 29, 2025

A jam-packed session unfolds across DC, earnings, and the broader market. Our Megan Cassella breaks down the political fallout from the latest tariff ruling, while Neuberger Berman CIO Joseph Amato explains why the market favors small and mid-cap names. On the earnings front, we hear from Dell, Marvell, Zscaler, Ulta Beauty, American Eagle, and Gap. Retail analyst Dana Telsey reacts to the retail names and what they reveal about the consumer. Eric Sheridan of Goldman Sachs weighs in on the tech sector’s trajectory after another earnings wave. CEO Joanna Geraghty on the new partnership with United 

Exponential Fitness ringing the closing bell for New York Stock Exchange. FTM Enterprise doing the honors at the NASDAQ. It was a positive day on Wall Street with stocks edging higher after a midday drop. The Dow had been down 270 points. Nvidia closing in the green but off the highs. The tech sector moving along with it. Micron and Broadcom among the top performers. Retail in Focus 2.

Best Buy plunging on a revenue miss. That company cutting full year profit and sales guidance. Coles also lower despite a narrower than expected loss. Bath and Body Works in the red on a weak outlook and on the flip side, Elf Beauty posting its best day ever on earnings up about 24%. Boeing hitting a 15 month high as the CEO says production is getting ready to ramp up earlier than expected. And Salesforce, the worst Dow performer, despite a strong report, the stock getting five price

target cuts today, down a little more than three, and HPQ, the worst performer on the S&P following disappointing results. Well, that's the scorecard on Wall Street, but winners stay late. Welcome to Closing Bell Overtime. I'm John Ford. Morgan Brennan is on assignment. Another big hour of earnings is coming your way. You got Costco, Gap, American Eagle, Ulta Beauty, all expected. And on the tech side, Delmarvel and Zscaler. We're going to bring you all those reports as they break. But first, to the White House, where a U.S. appeals court is now weighing in on the president's tariffs. Megan Casella joining me now. Megan. Hey John that's right some breaking news just in the last hour that the court of appeals for the federal circuit is granting the administration's request for an emergency stay. Essentially what this means is that at least temporarily all tariffs can remain in place in spite of that ruling just last night. Now the council for the Plaintiffs already out with a statement saying they believe this is merely a

procedural step and that ultimately they are confident that the Federal Circuit will deny the government's motion and allow the ruling to move forward, which would mean the tariffs, at least many of them, would have to be lifted in the meantime. Now this is all temporary. The plaintiffs have until June 5th, one week from today to respond. Then the court will ultimately decide again on that longer term stay. The White House, this is a win for them, but they're also sort of seeming unbowed here, knowing that they have some other options if this one doesn't prove successful for them. Take a listen here to White House trade advisor, Peter Navarro, just out here on the driveway

a few minutes ago. The court told us, they didn't all but tell us, they told us go do it another way so you can assume that even if we lose we will do it another way. So looking for other options that they know are out there if they need to find them. Then finally John, one other piece of news here from the White House today is Federal Reserve Chairman Jay Powell was here meeting with the President at the President's invitation. The Fed staying in a readout after that meeting that the two men discussed growth, employment and inflation, but that Powell did not discuss any expectations for monetary policy except

essentially to say that the Fed will remain data dependent as always and focused on its dual mandate. We also heard from the White House after that that the President told the Fed Chairman personally and directly in this private meeting that he believes it's a mistake not to cut rates. So both been sort of having a chance there to air privately a lot of what we've heard from both of them publicly. John.

All right, you always ask the tough, fair questions and do it respectfully. Looking forward to more coverage. Megan Casella, thank you. So should a change in tariff policy change your investing strategy going forward? Let's bring in Neuberger-Berman president and chief investment officer Joseph Amato. Joe, I know you like small and mid-sized companies here, but with these macro conditions, it can be hard to invest, no?

Certainly the macro conditions have kept our heads spinning in just this last couple of days with the latest tariff news. It feels like we're still going to be moving into a period where tariffs are going to be an issue. And if you end up with a tariff rate that's in the high single digits, I think it still has an ability to weigh on growth and push up inflation a bit. But I think some of the more worrisome tariff levels that were announced in early April seem to be a bit off the table. And I think that sort of left tail risk has been taken off. And that's partly

why we've seen the market bounce back. Do you have any expectation, should investors have any expectation, that in a way this takes off some of the pressure for countries to negotiate quickly? Because boy, I mean, it's kind of like that situation with the law firms, maybe if you do a deal too quickly, then you figure out the pressure that was put on you

wasn't exactly legally sound, you wish you hadn't. Yeah, it feels like the administration does have different pathways to put tariffs in place that would still keep pressure on other countries to push forth on getting a deal done. But if I were another country right now, I probably would take a step back and wanna have a bit of a wait and see attitude as to where things actually come out in terms of

the president's ability and the administration's ability to impose these tariffs. How do you play emerging markets then? Well, emerging markets is, there's a wide swath there. There's China, there's India, there's Latin America. So it's hard to generalize broadly. We have generally been more constructive on developed markets. Earlier in April on the big pullback,

we upgraded global equities, primarily driven by developed markets outside the US, which had been a significant underperformer over the last couple of years. So we think some of the initiatives in Europe, for instance, where they're putting in place more significant fiscal stimulus to their economies is going to be helpful. There's also a relative valuation differential between the US.

So we think that's where we would lean emerging markets right now. If you look to emerging markets for growth, but growth is slowing down a number of those markets and in India, valuations are pretty expensive. You look to emerging markets for growth, but growth is slowing down a number of those markets. And in India, valuations are pretty expensive. So right now, we'd probably lean more into value-oriented markets outside the US. Hold tight. We've got Dell results out, and that stock is popping. Christina Parts-Nevelis has the numbers.

Christina? What we're seeing is the company missing on earnings but managed to beat on the top line. The drag really came from its infrastructure solutions group, which is their data center business. That pulled in about $10.32 billion falling short of estimates, but it's the guidance for the road ahead that is bullish and pushing shares up 9%. They're calling for Q2 revenue of $29 billion at the midpoint, which is way above the street's $25 billion estimate on the earnings side,

where they're projecting $2.25 per share versus the 209 consensus, also much higher. The big bump because of the $7 billion in AI server shipments they're gonna do in Q2 that's more than expected, flushing nearly half of their Q1 backlog. For the full year Dell's sticking with their revenue outlook but bumping up their EPS target to $9.40,

which is really just a stark contrast from competitor HPQ's earnings just last night. Shares up over 9% on that bullish guide. John? All right. We'll keep watching it. Christina, thanks. Now, American Eagle earnings are out as well. Gabrielle von Ruge has the numbers. Gabrielle? Yeah, American Eagle reported an adjusted Q1 loss of 29 cents per share. That's a miss on estimates of 22 cents on $1.9 billion in revenue in line with consensus. Comparable sales were down 3 percent and merchandise margin tumbled by 960 basis points. That drop in margin is largely from inventory write downs, discounting and higher product cost.

American Eagle already withdrew its full year guidance, but the second quarter guidance it gave today was weaker than consensus. And in news release, CEO Jay Schottenstein called the quarter challenging and said it's disappointed by the results. John. All right, Gabrielle, thank you. Joe, what do you do with retailers here?

There's such a broad swath of different impacts. It seems like if you're in grocery and you're dealing with stuff coming out of Mexico and Canada, mostly it's one thing, but if you're dealing with apparel and a lot of your stuff is coming from China, that's something different. Yeah, I think it's going to be a challenging time for consumer-related businesses. Although, when you look at the underlying consumer behavior and activity, the consumer has been surprisingly resilient.

Labor market is relatively strong right now and hanging in there, and that's really led the consumer to hang in there. Now, as you start to see the impact of tariffs and higher costs, which we think will be in the data as you get further into June and then into July, that's gonna be the true test of how resilient the consumer is.

But I think the example of the two earnings reports you guys just talked about is the kind of dispersion that we're seeing and dispersion we expect over the next few quarters. Are you gonna have some companies that are able to withstand it, whatever sector they're in, and other companies that are gonna have a challenging time?

How concerned should investors be about the pull forward in supply that comes perhaps from these 90-day tariff windows and the ongoing impact of some of these credit effects? Student loans getting called in, again, some credit scores dropping and people having higher costs on that end, perhaps not having enough to spend?

I think one of the things that's going gonna lead to continued volatility in markets and individual stocks is gonna be a lot of the distortions in economic data. We're seeing that already. Look at the first quarter GDP number. You had a huge swing in exports that led to a negative GDP. Now there weren't the traditional conditions of a negative GDP quarter, which is more like a recession. So we expect that whether it's inventory levels being pulled forward or pushed out, pricing

that's going to be affected by some of the cast that's been created by the tariff situation is going to, I think, present a lot of opportunities, but also some risks and a choppy market environment. So we expect until you get greater clarity, particularly from companies and their guidance and they need clarity on the tariff situation, I think you're gonna be in a trading range and trade sideways for a while. All right, Joe, thanks.

Joseph Amato from New Brunsburg. Thanks, John. Berman, meantime, Ulta Beauty looking its best here in overtime. Its numbers are out. Melissa Repko, what's going on? Hey, John. So Ulta Beauty's numbers are out and it beat on the top and bottom line and it raised its

guidance slightly for both sales, same store sales, and for earnings. So good news all around and a little bit better than expected. It reported same store sales up 2.9 percent, much better than Wall Street expected. In terms of the top and bottom line, per share came in at six dollars and 70 cents compared to the five dollars and 81 cents expected according to LSG and revenue of 2.84 compared to the 2.8 billion expected and now expects same-store sales to be flat to up 1.5 percent Previously it expected same-store sales to be flat to up 1% John. Alright, Melissa thank you.

Are we going to do Marvell next? Yes, those numbers are out. Christina Parts-Nevel is back with those. We are going to do Marvell. It's a custom chip maker. What we're seeing EPS 62 cents, 1 cent beat on revenues of 1.9 billion. Also a little beat. Talking about the Q2 guidance, we'll say it's a beat but it's not by much. 67 cents adjusted EPS, that's what they're projecting. Q2 revenue is of two billion, slightly higher. So you can see the shares are now just oscillating between negative and positive for the data

center revenue in line for the quarter Q1. And their gross margins, that was the only thing that really stood out for me. Gross margins in Q1, 59.8, slightly less than what the street was anticipating, despite the earnings beat. They did say that the momentum is being fueled by strong AI demand in data center for the second quarter guide. Keep in mind, Marvell does design chips for AWS. Hopefully, we'll hear more about that relationship because there's been some concerns. Share is now dropping almost 2%, John. All right, Christina, thank you. Also, C3 AI today popped about 21% after results yesterday. They beat on the top and bottom lines and a solid guide.

Stock is heavily shorted, so that factors into the extreme reaction. I spoke with co-founder and CEO Tom Siebel today about the quarter, the Microsoft partnership bearing fruit and his decision years ago not to do AI business in China. So I think we have the largest ecosystem of distribution partners in the world. We have the largest family of enterprise AI applications of any software company in existence. So I think we're well positioned to continue to grow and establish a really substantial position in enterprise AI globally.

Today we do not do business in China, and I feel very, very comfortable with that decision. We're engaged in basically open warfare as it relates to AI with China, and we have chosen our side, okay, and we're choosing the side of freedom, liberty, and democracy, and we're supporting those governments. That is Tom Siebel, and lots of other earnings coming our way, including Zscaler,

which we are going through, that stock popping initially. We're ready with it pippa stevens You have those numbers. Hey john top and bottom line beat here for zscaler eps of 84 cents adjusted That was ahead of the 75 cents street was looking for revenues at 670 8 million also a beat billings came in well ahead of estimates now on the guidance front It was decent on earnings but was a little bit light on the revenue side of things. Now the cloud cybersecurity company did also announce a new chief financial officer.

You see there the stock got better than 3.5%. John? All right, the cyber names keep coming out. We got Rubrik and CrowdStrike coming up later on overtime too, not not today but soon. Well, we've got a lot more to come, especially in retail, got GAAP and Costco, both expected out in the next few minutes.

We're gonna have those numbers and Dana Telsey is gonna be here to give analysis, overtime's back in two. Welcome back to overtime, GAAP earnings are out, shares are tanking down about 12%. Gabrielle, Juan Rouge back with those numbers, Gabrielle. Yeah, I mean, shares are down, but it was another strong earnings beat from Gap with Q1 sales, comps and margin all coming in above consensus. Gap reported earnings per share of

51 cents, beating expectations of 45 cents on a decent sales beat. This might be what's weighing on the stock here. Gap's guidance doesn't include the potential impact of tariffs. If current duties do remain in effect, Gap is expecting a hit of $100 million to $150 million to net operating income in the second half. I spoke with CEO Richard Dixon. He told me the company won't be implementing meaningful price increases to offset that. What he'll do is they're going to reduce China sourcing to less than 3% by the end of the year, down from less than 10%.

John? Real, thank you. And don't miss Jim Kramer's exclusive interview with Gap's CEO that's coming up 6 p.m. on Mad Money. Let's get reaction to some of these retail earnings with our next guest. Joining me now is Dana Telsey, CEO of Telsey Advisory Group.

Dana, starting off with Gap, I mean, not including the impact of tariffs. I guess it's sort of tough since the goalposts keep moving here, but we got very different types of companies reporting here. You got Gap, Apparel, we got Costco, which is the membership. And how should investors see opportunity versus danger here? I mean, you have to look at some of the names and say, what does the outlook look like?

And you have to think about tariffs in some point of view given the fact that whether it's price increases, diversification of sourcing, it'll be there. When you think about GAAP overall not including the tariffs, basically the investors and the analysts will include something for tariffs when meanwhile their results that they gave they had very good comp store sales for the GAAP and Old Navy divisions and continued gain market share. The Ulta numbers probably were the standout so far because the Ulta frankly, they not only raised guidance, beat the comps, they had better margins.

It was very encouraging certainly and they saw increases in average transaction and traffic. You think about Costco, we all knew the sales already because they put out monthly comps. It really is the bottom line EPS which they beat consensus also. And when you think about these value names or where consumers go to, Costco is one of the the locations and destinations where they do rely on. So I think an overall American Eagle, one last one, their numbers are weaker than expected in terms of the guidance. They are already set up the, delivered the setup last week when they reduced their expectations for Q1. That is certainly a wait and see. I think that there's more opportunity and

abracrombin in the near term given the resilience that that company is having. Well Dana, since you mentioned it, we are thinking about Costco because the earnings are out as you mentioned. Melissa Repco has those numbers Melissa Hey John, so the stock is not moving much, but Costco posted a modest speed on earnings It's roughly in line when it comes to revenue reported earnings per share of four dollars and 28 cents compared to the four dollars and 24 cents that were expected and As I mentioned revenue came roughly in line at sixty three point two compared to the 63.19 billion expected, John. All right, Melissa, thank you.

Dana, how long can GAAP hold its breath? I guess is my question around tariffs. It sort of seems like they're saying we're not anticipating meaningful price increases now, but here's the size of the hit to net income from tariffs. I mean, eventually, either they raise prices and demand reflects that, or they don't raise prices, and the profits go away, right, or the tariffs go away. How are you gaming out who's got the capability

to withstand that pain, and who doesn't? I think overall, right now, are tariffs gonna be here or not? We have this price tracker that we put out every week of around 80 items. that pain and who doesn't? I think overall right now our tariffs going to be here or not. We have this price tracker that we put out every week of around 80 items and we haven't seen the prices increase yet. When you game out what you're going to have happen any of those companies with product newness and innovation can be able to garner price and look what you saw from the tapestries of the world even the Levi's of the world you're able to get some

price on newness. What you're seeing with Gap, with the newness and creativity, like Gap Studio, like the occasion where at Old Navy, like the fact that they're going to get the benefit of the trade down customers, there's opportunity to gain share even if they have to raise price a touch. And I think you'll first hear about that. It'll be third quarter and fourth quarter when that'll be there. In your estimation, who's got the best sort of sourcing manufacturing advantage based and I think you'll first hear about that. It'll be third quarter and fourth quarter when that'll be there.

In your estimation, who's got the best sort of sourcing manufacturing advantage based on where they already have that capability outside of China and other high tariff places? Two companies. Birkenstock, given it's Germany and Portugal essentially, and obviously you don't know about Europe in a real way yet, and then it happens

to be Bath and Body Works, given that over eighty percent of their goods are manufactured here in north america well it seems like if you're like putting on your face or spread it on your body maybe it's doing a bit better than you mentioned uh... elfin and all time as well why are they avoiding so much of this trouble i think there's a couple things happening is newness you look at the newness that all that has delivered milk makeup this quarter, the new hair care line by Beyoncé.

It definitely is attracting consumers. And also when you think about what's been said in the past, it's the lipstick factor. It makes people feel a little bit better for not a high price, and beauty definitely is working. You look at the Disney Princess collection with Bath and Body Works, that's why they delivered the 3% sales increase this quarter. Well, all for people feeling better. And making more money too.

Dana Telsey, thank you. Thank you. Well, shares of NVIDIA higher today following its results, but barely positive for the year compared to Philip Morris, up nearly 50%, one of the best performers on the S&P 500. But are we about to see a reversal out of some of this year's leaders in search of catch-up candidates? We're going to check in with Mike Santoli next on Overtime.

Welcome back to Overtime. Well, during May's rally, we started to see a rotation out of some of the yearly winners for the catch-up trade. Let's bring in Senior Markets commentator Mike Santoli. Mike? Yeah, it was pretty distinct character of today's action, John, was this little bit of profit taking among the big gainers for the year.

In fact, I looked at the top 15 performers in the S&P 500 on a year to date basis today. 12 were down, three were up on a day when two out of every three stocks broadly were up on the market. So it shows you that we're culling some of the winners here. So here are three of them that were big downside contributors today.

Uber, GE, Vernova, Philip Morris International, obviously great year today performance, but today and even back into last week, you started to see those curl under. Also happening arguably with asset classes. We have one more day in the trading month, of course, May. There is the makings of a pretty big asset reallocation among pension and other asset allocators

out of stocks into bonds. So what we have here is S&P 500. This is just month to date, of course. And that's been obviously a huge rebound trade. And then the AG is the aggregate bond market, ETF, and that is lagged. So today you did see a bid in bonds, you did see a little bit of heaviness

after the strong open inequity. So I don't expect it to be super profound, but people are saying that if you do the math on it, there's room for more of this to happen among pension allocators. Finally, look on a year-to-date basis, the stock versus bond trade. And this is in total return,

so it includes interest from bonds and dividends, naturally massive drawdown in stocks. Along the way there into early April but we've got most of it back in there kind of a dead heat almost there you have bonds outperforming slightly and that's almost entirely

because of the interest not because of price gain so basically if you're a balanced. Investor you kind of have more or less starting a little bit ahead of where you began the year but not too much. So Mike, this catch up, these rotations, is this healthy, you know, a broader market,

a more balanced market or signs of fear and indecision? I think it's generally healthy. It's kind of the way the market sort of keeps itself supported as it waits for a lot of these, you know, other cards to turn over about trade policy and some of the macro and things like that But you definitely don't want to see the big winners sell off precipitously, right? I mean you saw things like Palantir. Okay, it's curled down. It's been this massive winner You don't necessarily want to see them really come in for heavy profit taking because it's not clear to me There's another theme out there. One thing I'd point to is things like industrials,

they've hit a new high, that's a pretty decent confirming message for at least parts of the U.S. and global economy and so that's something you'd want to see maintained as opposed to rotate it out. Yeah, Apple closed under under 200 today. You don't want to see that necessarily either. That's right. Mike, thanks. Well, time for a CNBC News Update with Kate Rooney. Kate. Apple closed under 200 today. You don't want to see that necessarily either. Mike, thanks. Well, time for a CNBC News Update with Kate Rooney. Kate. Hi, John.

The White House said it remained confident in Health Secretary Robert F. Kennedy Jr.'s Maha report that was after the nonpartisan news platform Noticed highlighted the report used seven sources that didn't exist, White House Press Secretary Caroline Levitt said and called those inaccuracies, quote, formatting issues. Meanwhile, a reward for the last two fugitives

who remain on the run after breaking out of a New Orleans jail, that's ticking up as of today. Authorities are offering up to $50,000 each for those inmates. And while they say they're closing in on the men, they still need tips because of their movement. Eight of the ten inmates who escaped on May 16th have been captured. And finally, Netflix has greenlit a limited series on the rise and fall of cryptocurrency

exchange FTX. Anthony Boyle and Julia Garner are going to be starring as Sam Beckman Fried and Caroline Ellison respectively. The eight episode series called The Altruists is one of several TV and film projects delving into the company's collapse. Jona, somebody who covered that trial closely, I'm excited to tune in. Yeah I want to see who's going to play Kate Rooney. Kate, thanks.

Well, Big Tech earnings are now in the rear view mirror and they've contributed to big gains for the Nasdaq's now up nearly 10% this month on pace for its best month since November of 2023. Up next Goldman Sachs head of tech and media and telecom shares his best ideas following all those results. Stay with us. Welcome back to overtime. Markets inching higher today, well off the early morning levels.

Real estate and health care your leaders We got a flurry of earnings at the top of the hour some big movers among retail names gapped down big after a warning of Up to 300 million dollars in tariff costs American Eagle also lower after posting a bigger than expected loss Ulta higher after a big beat on earnings revenue and same-store sales a couple of other names We are watching, in storage, NetApp beat for the fourth quarter, but it's down a little more than 5.5% because its guidance for Q1 is less than what the street

had been expecting on both earnings and revenue. UiPath with a slight beat on profit and sales, that one's higher by nearly 11% because its guidance for the current quarter is above the current estimates. Meantime, the broader tech sector is on pace for its best month since November 2023, driven by Supermicro, Seagate, and Nvidia. That's after strong earnings across the board for the non-Tesla mag stocks, mag seven stocks,

including Nvidia's performance yesterday. So what's going to drive the next leg for tech stocks, if anything? Where should you be placing your bets? Joining me now is Eric Sheridan, Goldman Sachs, co-lead of the TMT Group. Eric, I'm struck by the fact that initially we weren't expecting much on guidance this quarter, but expectations as things came in strong seem to have shifted because lately a lot of companies are getting punished for cautious guides. What's your take?

Yeah, I think we've been on quite a journey with corporate earnings going back to mid-April where there were very, very low expectations. And frankly, through the end of April and then the beginning part of May, better than feared was a term we used a lot to describe the reactions that were generally positive to earnings. Expectations have reset higher over the last couple of weeks broadly for the tech landscape. So the hurdles are higher.

The need to meet or exceed guidance has probably moved up from where we were from an investor sentiment standpoint in mid April. But the overall environment is generally stable, especially at the high end for the digital consumer. The AI trade continues with CapEx continuing to be a strong driver of deployment. And we're starting to see the beginning of broader deployment of consumer AI. And that was very much a theme on display last week around Alphabet's Google I.O. event

and continued innovation out of a lot of the private companies in the sector as well. So given what we're seeing in some of these arguably cautious guides and what's this week become known as the taco trade, Trump always chickens out the idea that maybe things aren't going to be as bad as they initially seem, are some of these moves on cautious guides or disappointing guides if they turn out to be more than cautious, are they buying opportunities? Typically they are, as long as visibility can improve. The tariff dynamic, which in my sector typically impacts around e-commerce and advertising, still remains in a relatively low visibility landscape.

There's been a lot of moving parts globally. There's been different and shifting thematic elements coming out of the administration and reciprocal tariffs from other parties globally. So I still think investors have low visibility into what the June quarter looks like, but then more importantly, what the second half of the year looks like.

So any cautiousness is met with selling, mostly because of that visibility dynamic Pervading across almost every investor conversation I have but as we get month to month to month Visibility improves we generally are seeing those as buying opportunities. Does the reaction to Dell suggest that the AI trade still has legs Why don't cover Dell, but I will say this the AI capex theme continues to pervade. So if you go look at across the largest companies Amazon reiterated their capex guidance, Alphabet reiterated these were very high growth rates that the market had to absorb in the front half of this year and Meta actually raised their capex guidance for 2025. So the build out of AI continues.

I would not count on a slow down in that looking out through the remainder of this year at a minimum. How are you framing which layer of the stack most likely stands to benefit next? We are definitely moving from the infrastructure layer to more proving out the platform and application layer. John, you've been nice enough to have me on and we've talked about this before. Every computing cycle that I've ever lived through eventually moves from the infrastructure layer towards platforms and applications.

So in the mobile computing cycle, you had to build out spectrum and networks, and then you eventually build out the app stores by Apple and Google, and then eventually you built out the Airbnbs and the Ubers of this world. We are still on a journey similar to that with AI. And I think we've seen a lot of innovation in the last 10 days alone on where Google wants to take Gemini, where OpenAI wants to take JCPT, where Anthropic wants to take Claude.

There's still a lot of innovation on the application layer that's ahead of us with respect to AI and it could drive a lot of utility-like behavior. All right. We'll see if it drives profits eventually as well. Eric Sheridan, thank you. Goldman Sachs. Well, I had an exclusive interview with the CEO of JetBlue on her turnaround plan and a new alliance with United. Plus, we'll hear from the CEO of Nutanix and the CEO of Elastic on the back of their results.

Overtime is back in two. Welcome back to Overtime. Elastic reporting fiscal Q4 results. The stock is down about 11%. Elastic revenue beat at 388 million versus 380 consensus. Non-GAAP EPS was 47 cents versus 37 expected for Q1. Elastic guiding to revenue of 397 million at the midpoint versus 396 expected. What for the full year elastic guiding to 1.665 billion dollars in revenue at the midpoint

short of the 1.68 billion expected. I spoke with CEO Ash Kulkarni told me he's being cautious on the guide with this uncertain macro environment but We also said AI is driving significant business. GenAI has been, like we've talked about in the past, a pretty strong driver for us. And we are seeing customers move from ideation to implementation. We are seeing them build agentic workflows to automate all kinds of business processes.

And every single one of them, as we've talked about, requires retrieval, requires some connection to your enterprise data, and that's where we shine. We are now one of the most widely used vector databases out there. That drove strength across the board, and Cloud was strong for us. But in AI, we are also seeing strong demand where customers want to run

these workloads in their own data centers. But in AI, we are also seeing strong demand where customers want to run these kinds of workloads in their own data centers. So our self-managed business also grew very nicely because of that. On that note, I also spoke with Nutanix CEO, Rajiv Ramaswamy. That stock was down about 4% today after results that beat on the top and bottom lines yesterday in overtime. In a raised guide, he echoed some of what Kulkarni said about driving more on-premise data center investment,

adding to the hybrid cloud story. There's a lot of data being generated at the edge that it may not make sense for you to take all the data that's being generated. Let's say you're in a manufacturing floor. There's a ton of data. In fact, Micron talked about, in their example, about how they have a lot of data that they're looking at

and they're looking at things like, what defect inspections and a lot of capabilities like that based on data that they're seeing right there in the manufacturing plant. It doesn't make sense to take all the data and put it in the public cloud, even if you could. And in some cases, the decisions have to be made in a very real time manner.

Also explain some of what's helping Dell on its results right now, selling a lot of that hardware both into the cloud and on premise. Well, up next, the CEO of JetBlue on the carrier's new partnership with United and whether she is seeing any signs of slowing demand because of the uncertain economy. And later Mike Santoli is going to come back and look at a troubling trend that's emerging in the labor market, what it could mean for the economy. Be right back.

Welcome back to Overtime. A new deal is set to take off as two airlines join forces. JetBlue and United are announcing a deal that would allow the carriers to sell seats on each other's flights and share benefits on both sides. Partnership would also allow United Airlines to return to JFK International Airport as soon as a little over a year and a half from now. Let's send it to Phil Laboe who's joined by JetBlue Airways CEO, Joanna Garrity. Phil? Thank you, John. Joanna, thank you for having us here at your headquarters. Thank you. He set it up, John set it up with this alliance

between you and United. Why United and how important is it for you to have this kind of partnership that allows you to perhaps better compete with the likes of a Delta at JFK? Great. Well, thanks for having us today, Phil. We're very excited about what we call a collaboration. It's very unique. It's an opportunity for JetBlue to partner with United Airlines, another customer-centric airline, with a real focus on how do we broaden our network and offer more destinations to JetBlue customers, the ability to allow our TrueBlue members and their MileagePlus members to earn and burn points on one another and then to sell our flights via their website. We can't be more pleased and we think it's going to give JetBlue the opportunity to compete

better in the Northeast. But you tried this with American. Now this is not a code share agreement. But you tried this with American and a judge ultimately said that's anti-competitive. Why will it be different this time with United? Yeah, so we've been very thoughtful. The judge in the American Airlines case laid out a blueprint that would allow for a partnership to proceed. And so we've really tried to make sure that this particular collaboration falls within the outline of that blueprint. So it's an interline, not a code share. It's a frequent flyer program.

We are not coordinating our schedules. We are not coordinating pricing. So we believe it's a very sort of up the middle of the field kind of partnership, but one that's gonna bring tremendous value to both JetBlue's customers, but also United's customers. Your stock slipped today, not because of this deal, because this has been widely anticipated for some time.

But when I talk with analysts, one of the things they say is there's still questions about whether or not the turnaround will take hold. And a lot of that is redoing your route structure. Are you starting to see those changes pay off? Yeah, we're really excited about our Jet Forward plan. We're starting to see some nice progress. First in the area of operational reliability, we've really done a nice job there, improving our operations.

Our customer scores are really rising in a pretty meaningful way and then when you look at our network about 20% of our network is in transition and it takes a little time for that to actually ramp up and mature but we're seeing some nice progress there particularly as we look at some of the additional airports we've added out of the Northeast. I have to ask you in regards to demand before we went on we were talking about what you're seeing with Newark are you seeing a benefit from people who are saying I'm just not going into Newark right now? Yeah, you know, I think what we're seeing in the industry is seeing is, you know, some

of the airports that surround Newark, whether it's LaGuardia, JFK or Philadelphia, are most certainly seeing a benefit from some of the air traffic control challenges, but it's ultimately transitory. And as the runway construction ends in Newark, we would expect that will kind of resume to a more normal demand profile. The geared turbofan engine issue, it continues to be, it haunts you guys to a certain extent. You've got a number of aircraft on the ground

because you can't use them without the engines. Are you confident that you can get back to a position here where you can get more of those into service in the second half of this year? We continue to we continue to think the GEAR Turbofan is the engine of the future. We've most certainly seen some near-term headwinds which have been challenging as Pratt-Wintney ramps up its supply chain and ramps up its maintenance facilities. We're starting to see some progress but it's early innings and you know we're focused on continuing to see that progress as we move through the year and into 2026. Part of this agreement is the opportunity that United customers will go to Paisley by JetBlue

and say, look, I also want to book, whether it's a car or a hotel, et cetera. How much will that potentially add to the revenue mix as you go into the next couple of years? Yeah, part of the deal is to actually provide the ancillary platform for United. So JetBlue does a great job selling vacations, selling cars, hotel rentals, and insurance. And you have a wider audience. And we have a wider audience. We do it in a very bespoke, thoughtful way, kind of right customer, right place, right

time. And we're going to power United's ancillary platform. And that's a nice part of the deal because we think we can frankly do it better and do it with better customer service. And when I look at this partnership, it's really about two great customer-minded brands coming together and delivering more for the consumers in the Northeast, more for the consumers worldwide, and really making our loyalty programs that much more

relevant and that much more powerful. Quickly, I have to ask you about the consumer. How do you feel about what you're seeing with bookings? I'd say back at our earnings call, we talked about how we were adjusting capacity to reflect the demand environment. Obviously, the continued volatility around tariffs has a bit of a challenge in the consumer profile because they want to see stability.

But as we move into the summer, we're looking at hopefully customers getting a bit more confident in booking that second vacation, not just the first. And as we move through the year, we're confident JetBlue is working and we're moving back on a path to getting JetBlue back on a path to prosperity. You don't have a huge international route structure, but are you noticing any impact in terms of either people hesitant to go overseas or those overseas hesitant to come here?

Yeah, the international flying's been holding up pretty well, so we're pleased with that. But obviously, you know, all of the uncertainty and the volatility plays into how people think about where they're gonna spend their next dollar. So the more certainty we can have around that, the stronger the consumer will ultimately be. Joanna Garrity, CEO of JetBlue, first time ever here at the headquarters.

Welcome. Happy to have you back. It's great to be here. Thank you. We'll come back. John, we'll send it back to you. Phillipo, thank you as well. Well, continuing jobless claims climbing well above pre-COVID levels. If you don't have a job, it's not easy to get one.

Mike Santoli is going to break down what that could mean for the labor market and the Fed. And don't forget, you can catch us on the go by following the Overtime Podcast on your favorite podcast app. We'll be right back. Welcome back to Overtime. Initial jobless claims came in higher than expected today,

the highest weekly level since April. Meanwhile, continuing claims hit their highest level in four and a half years. Let's bring back Mike Santoli for a look at what those continuing claims numbers say three and a half years. Say about the labor market, Mike. Yeah, John, obviously it's softening up, especially in terms of hiring.

We've seen a lot of indicators like this. There's not a huge flood of layoffs by big companies and governments, but there definitely is a little bit of a sluggishness about adding new people. So here's the four-week average of those continuing claims. Now, the absolute level we're at, just about 1.9 million, it's not in itself in the danger zone. If you go back, we were contained under 1.8 million for most of, let's say, late 2018 and 2019.

But that was not necessarily meaning that that's the only reading of hell. We actually were above 2 million as recently as 2017. So it took a long time after the global financial crisis to work that down from 4 or 5 million down to 1.8, which is pretty rock bottom. But the trend, obviously, is higher. If this were a stock, as people say, you might want to buy it, because the trend looks like it's pretty strong. The initial claims at 240,000,

yes, they were above forecast by about 10,000, but again, that also isn't at an absolute level where you would really start to say that we have outright economic weakness. Really, 300,000 weekly new claims is kind of where you start to pay a little more attention. So it complicates the picture a little bit for those saying that, look, the economy is

really robust here. Certain indicators, certain parts of the economy look like they're operating at a pretty slow speed. I guess this could be seen as some hard data catching up to some soft data because the consumer people being surveyed have felt kind of bad for a while, but the hard data catching up to some soft data. Because the consumer people being surveyed have felt kind of bad for a while, but the hard data said, eh, things are pretty good. But now if you got people who are out of work newly,

and then a bunch of people who have been out of work for a while, and it starts to pile up, might not be good. That's right. Now this is without a doubt hard data. This is actual people collecting unemployment claims. And in fact, you know, you even started to see in the recent like University of Michigan consumer sentiment numbers, there's an indicator in there about people who say, I talked about earlier this

week, jobs that are plentiful versus jobs hard to get, or that's in the conference board numbers. You are seeing that weaken a little bit. So fewer help wanted signs, a little bit longer time to find your next job. All of that fits together. Again, it's just a matter of putting it in some kind of perspective of saying it's not about it being a bad economy. It's just being less strong, at least in the moment, for workers. Speaking of hard data, how is personal consumption expenditures, price index, the PCE, going to add our understanding there. It looks like, when we get that in the morning, it's gonna be more or less on trend in the, you know, maybe mid-twos, 2.6 or something like that.

And that's in the zone we've been in for a little while. It's not gonna be enough that's gonna kinda move the Fed in the direction of saying, okay, we've resumed progress on inflation, therefore we have room to cut rates. But at some point, it wouldn't be implausible to say that that's possible. Remember, the Fed funds rate is above

four and a quarter right now. If inflation is two and a half plus or minus, you still have a gap there where the Fed could see their way clear if they're confident inflation's not gonna pick up. But of course, they're not gonna be that proactive. They're not gonna try to project what the tariffs mean and all the data to come.

As Powell reportedly told the president today, they have to wait and see the numbers. Big macro overhang over guidance, over a lot of this data, questions about what's going to happen with tariffs. We don't know any of that heading into the end of the year. We're all held in place. It's wait and see across the board.

Indeed. Well, we'll be back here tomorrow, as we do here on CNBC. Mike Santoli, thank you. That's going to do it for overtime.