Closing Bell - Closing Bell Overtime: The Rally Keeps Climbing As Stocks Post Strong End to May 5/29/26

Episode Date: May 29, 2026

Markets continue their advance as investors debate whether leadership is finally broadening beyond AI and megacap tech. Keying in on a massive move in Dell: Matthew Niknam of Truist maintains a Hold rating and explains why he still sees limits to the upside. Warren Pies of 3Fourteen Research makes the case that the rally has room to broaden and argues the data does not support the idea that AI has become a bubble. We deep dive on recent big winners: Robinhood surges as investors embrace new product launches, higher price targets and AI-driven initiatives. Ford posts a remarkable gain as Wall Street responds to domestic manufacturing themes and improving sentiment around the automaker. Lower oil prices boosting the discretionary sector as Hyatt CEO Mark Hoplamazian discusses consumer behavior, travel demand and the outlook for the industry. Our Morgan Brennan sits down with Agriculture Secretary Brooke Rollins at the Reagan National Forum to discuss policy priorities and the state of the economy. Finally Bradley Tusk of Tusk Ventures tackles one of the market's biggest questions: if Anthropic is approaching a trillion-dollar valuation, SpaceX is worth trillions and stocks like Dell continue to surge, are investors witnessing another bubble or simply the next phase of technological transformation? Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to closing bell overtime. We're live from Studio B at the NASDAQ market site. I'm Melissa Lee, along with Mike Santoli. Stocks higher across the board, record closing highs for the Dow, the NASDAQ and the S&P 500, the Russell closing with a small loss. But all for closing with gains for the week. That's a nine-week winning streak for the S&P 500. That's the longest since the end of 2023. It also closes the book on May. Gains across the board 8% for the NASDAQ. That's on top of a 15% gain in April. And Apple heading an all-time high up for the 10th straight week. It's longest winning streak since 2009. And of course, the focus continues to be on technology and whether or not this vertical move can go higher.

For sure. I mean, a general principle, new highs are more bullish than bearish. You know, trends usually stay in place longer than you think they can. Leadership that's earnings driven and is, you know, kind of embraced by a real coherent secular theme, all great. But you can definitely also overshoot in the meantime. And you've had a very distinct momentum over quality, offense over defense tone still this week, even though, you know, the broader list of stocks did okay on a relative basis.

So I do think you get to the end of May. You start looking ahead to what might be able to throw a flutter into this story, whether it is a jobs report, a Fed meeting, things like that. Yeah. It's been the best base since the 1950s. I mean, it's been quite a track record for this month. What struck me, at least today in the past couple of days, is the IGV and how there was much more participation across the board. You saw Microsoft finally, you know, kicking in here, CRM this week,

has gotten some new life. And so IGB at 100, over 100 at the point, I mean, it feels a little firmer than it did even a week ago. It does. It certainly looks like an attempt at a real base. It did cross above its 200-day moving average, which is still going down. So the trend is lower, but it's now sort of challenging that maybe it has a possibility to reverse that. I did think the snowflake numbers unlocked something there. So we'll see. I also wanted me be sure people realize month end, sometimes you get these countertrend moves, you get some short covering. So make sure we are aware. We've got to test it next week. Well, Tech, of course, as we've been saying, still the biggest driver of the action.

Let's get to Christina Parts Nevelos for more on that Dell and related stock moves. Yes, definitely Dell. And to your point, tech, it led the market hard, but under the surface, it was somewhat of a narrow rally. So semiconductors remain on a historic run. With Dell up, what, over 30 percent adding fuel to that story today. The company warning of shortages across memory, processors, specifically CPUs and hard drives with lead time stretching up to a year. That lifted other companies, Microns, Sandisk, Arm. Even competitors, HP and Super Micro surging about almost double digits today. The broader chip index is on pace now for its best year on record, helping drive tech to the top of the leadership board both today

and actually for the week. But it's not just chips. As you mentioned, Melissa's software has been catching up higher than semis over the past month if you use the IGV versus the socks. IGV seeing its fourth straight month of inflows, the longest streak, I should say, since 2020. Octa was a standout. Shares jumping about 30% for their best day today ever on what else, agentic AI demand. And with that momentum, it's spilled over into Palantir Oracle, Snowflake, of course, like Mike said, also helping these names.

And they can all closing both sharply higher at 9% and 10% higher. Still, outside of technology, the market was definitely weaker. Just two out of the 11 sectors closed higher today. Consumer staples, the biggest laggard once again. Costco, Walmart, Target. These are just a few names that could fit on the screens, lower on concerns, you name it, from, margin pressure to fading pricing power, guys. Christina, thanks, Christina Parts and Nevelas.

Let's get more on that massive move in Dell. When the company returned to the market in 2018, it essentially went nowhere for years. But as the AI boom began, the company leaned in, and instead of racing to make an agent or provide energy, and focus on what it knew best, and that would be hardware, of course. It's been on a tear since, up 700% in three years. After last night's results, analysts are racing to catch up with at least seven firms raising their price targets on the stock this morning. But not everyone is jumping on the bandwagon. Let's bring in Truist Senior Equity Research Analyst, Matthew Nicknum. He kept his hold rating, but raised the price target from 170 to 360. Matthew great to have

be with us. It might be a hard position to be in at this point, Matthew, it sounds like you're most hung up on valuation. In your view, how untethered is Dell from valuation fundamentals right now? Hey, first of all, thanks for having me. I would say, first off, Dell is seeing momentum, no question. If we think about demand across each of their end markets, it's there. Supply is tight. Dell has got it, and they're also benefiting from a very favorable competitive backdrop. So no question near term, the momentum is there, and I think the company messaging last night indicates that momentum is going to continue. Our view is a little bit more balanced. If you think about the hold rating, we talked about positive views on fundamentals. The offsets there, valuation, as you

mentioned, the stock's now trading in line with the S&P multiple. This is a stock that historically has been about half of the S&P, about nine times average P, if you think back the last five years. So I do think valuation is a little bit stretched at these levels. The other piece I would just mentioned is rising memory costs, rising input costs. Dell has obviously been very adept at passing through price increases, but at some point we do sense there may be a little bit of moderation in demand as we think about fiscal 2028. And Matthew, you said it right there, which is the market right now is implicitly saying that historical valuations don't really apply because maybe this is a different structural industry versus what it was, the durability of demand. I guess you'd have to make the call,

though, and whether, even if this buildout continues, the profits are going to continue to accrue to some company like Dell, right? They're providing the servers. It's not exactly like the cutting edge of the innovation on the value chain here. So how do you navigate all that? Absolutely. Yeah, it's an excellent question. And so I would say near term, much more constructive if we think about where Dell sits across the supply chain, across access to capacity, the access to supply. And that's what customers want, whether it be Neo Clouds, whether it be enterprise customers or sovereigns. Dell's got the full suite. They've got financing arms that can help customers that need some help with financing. They've also got services. So great position

to be in right now. But I would also caution, there is an element of pull forward that's happening right now. And we saw this a little bit coming out of COVID with the supply chain crisis for customers were very aggressively purchasing and took time to digest. I'm not saying that happens anytime soon by senses this continues for two to three quarters. But if we think about rising input costs, whether they be memory, whether they be freight shipping, that's going to make its way onto the customer. And at some point, we do sense there may be a little bit of moderation. And with valuation where it sits today, that really dictates our hold rating at this point. I was going to ask you how you view some of the big pops that they saw in terms of line items to

revenue. I mean, in terms of the pull forward point that you just made, the 18% jump from sales of PCs to commercial customers, that sounded like pull forward. How do you think about that kind of business, that pace of business continuing if it is pull forward? Well, I mean, to be fair, there's also a Windows 11 end of life, Windows 10 end of life, Windows 11 refresh. So you do have customers who are maybe due for a little bit of a refresh. And there is a substantial part of the PC base that's still on PCs four years or

older. So that may be a little bit more unique. But if I think about a traditional server, if I think about the PCs, as you mentioned, we do model a fairly sharp deceleration in upcoming periods. Now, part of that has to do with supply. Bell hasn't gotten ahead of itself. They have not guided to matching supply with robust demand. They are assuming there are some supply constraints that do materialize more materially in the back half of the year. But yes, absolutely.

If I think about the PC segment, growth of call at high teens last quarter, low 20, of what we're modeling next quarter, we model an exit rate in the lower single digits into next year for PCs. So as the enthusiasm, Matthew, rolls across this entire industry, looking for the next beneficiaries and who can do well here, across your coverage area, I mean, HPE was up huge today. I know you cover Cisco as well. They've had their run. Is there any place where it's not really reflected or do you think has more upside? Yeah, I mean, HPE reports Monday night. We've got a buy rating on HPE, trades at a discount to Dell, bigger networking business nowadays with Juniper in the fold. That's a name we like. We also like Cisco. The other one I'll mention is we

also like Arista networks as well. The networking guys have a little bit more gross margin, a little bit more stickiness, I'd argue, durability. Nothing against Dell. I think Dell has done phenomenally. Kudos to the team there. They've been excellent, but we see a little bit more upside in those names that I just mentioned. All right. Well, keep an eye out. Certainly for HPE next week. Matthew, thank you so much. Matthew Nicknham of Truest. Well, Mays Rally has been tech led with the NASDAQ up about 8 percent. The gains were mostly concentrated in AI-linked winners. So should investors be concerned about so much concentration in one area? With us now with his thoughts, is Warren Pye's co-founder of 314 research. Warren, good to see you. I know that you're big on

the, you know, let leaders lead and let's not worry about whether, in fact, the rally is so now. where does that bring you if you mark those views to market today? Yeah, thank you for having me. I wouldn't say we don't worry. I definitely worry, you know, it didn't track things and watch things. But investors have a tendency to cut these things shorter than they need to be. And so what we like to do is just bring it back to the data and what is the sentiment telling us and things like that.

Our sentiment model is still mildly optimistic, but not showing what we would expect at, like a real serious top. Last week when we had that little 2% or was it two weeks ago, we had that 2% pullback, we saw big inflows into money market and cash ETFs. And the fundamentals behind all this are in good shape. And so I get most of my questions about, is this a bubble or are we going to sell off? There's still more, I would say, pessimistic than optimistic. And so that leaves me to believe that there's more upside here, fundamental support it,

and that's where I see it going. And we might have a deal with Iran. And if that is the case, Warren, what happens to the composition of the markets in terms of the gainers? Do we continue with the AI leadership? Do we broaden out? Do we have both at the same time? Yeah, I think that's one of the things we've been looking at to try and get this thing to broaden out is that once we get, and my view is that the war is done. There's no appetite for further escalation. And it's just a matter of how that MOU gets massaged for the public. But I think the market is sniffing that out. I think the loan market is sniffing that out.

We talked about it. It's been a narrow rally. I think that there's been a lot of damage to capital markets from the conflict. We've lost probably a billion barrels of inventory in the low market. We've probably put the floor of oil up $30 a barrel. And as a consequence, we've caused the Fed to back off of their cut cycle, and that's pushed rates up. I think all of that relaxes a little. We don't revert to the pre-war level, but we relax a little.

And I think that gives some room for the equal-weighted S&P to rise. Equal-weighted S&P, much more rate-sensitive, much more macro-sensitive. What I've seen in the data is that you get these hedge funds who put on AI long, semi-longs, and they pair them with non-AI kind of consumer staples and other utilities and financials and things like that, shorts. So I could see some net exposure rising in shorts closing out in equal weight, taking a little bit of the baton over the summer. Yeah, I mean, we've obviously seen kind of little gestures in that direction as we've gotten de-escalation there.

You mentioned that the floor for oil has probably gone up $30 or so. Does that mean that where we are right now in the high 80s for WTI is all we're going to see on a reopening of the straight, or do you think that could break down further? Probably 80 would be my floor, but I think we've reestablished. I highly doubt we're going to go back. to where we were. I do believe if it wasn't for this war, there was a sizable glut. That's kind of what bailed us out. It's one of the things that bailed us out during this process, but that's gone. And I think oil would have been in the 50s. Instead, I think we're going to have to deal with

oil in the high 70s, low 80s going forward. I think the important thing for the equity market, though, is that we're taking that right tail away. That right tail was scary. The concern that we're going to hit tank bottoms and things like that. And it looks like we're going to avoid that. And so the equity market just wants to know there's not going to be a disaster in the oil market. And that's what's going to allow, I think, the market to broaden out of the summer. Warren, it was the best week for Treasury since the war began. So we are seeing yields move in the right direction from an equity standpoint. But do you, you know, in order for your bullish market call to take place, do we need to see more backing off in yields at this point?

And should we expect that since the big part of the increase that we've seen since the war began in yields, happen in the real yield component, non-inflation expectations? Yeah, that's a great point. I think that no, the bottom line is no, I don't think we need to have yields come back. If you remember before the war, though, the tenure was at like 392. And so we went all the way up to about 4-7 and now we're back to 4-4-3. In my feeling, over the last few years, the equity market has got much more disturbed by a rapid rise in yields. And so we had that rise.

I think the market kind of took that gut punch, the equal weight especially did, and this pullback and yields is enough. I think that I highly doubt we're going to see the tenure get back below 4-3 anytime soon. Like I said, even though the war looks like it's over and all these markets are kind of exhaling, we haven't seen any cuts come back into the sofa market. So going into the war, we were expecting maybe two cuts, three cuts from the Fed out to the end of next year. Those are gone. So we're in a true hold regime at this point for the Fed. And that tells me that there's going to be a floor to the 10-year. I don't think that I think the two-year stays around 4%.

10-year 4344, and we have a flatish yield curve. But I think that's fine for equities. It's just not a very attractive place for fixed income. Warren, great to speak with you. Thanks. Warren Pies, 314. And there you see the floor in Chicago, the placebo, of course, where the closing bell will ring ending the regular trading day for options.

Coming up, we're continuing to look at some of this. This week's big winners, Robin Hood breaks away from the Bitcoin trade, and Ford keeps on trucking. More on those names coming up. You're watching Closing Bell Overtime, live for the NASAC market site. Welcome back to overtime. Shares of Robin Hood jumping today and rallying 26% this week. That's its best week in more than a year. AI buzz being cited as one reason for the optimism. Mizzouho raising its target on the stock today to 115 from 110 on the back of new agentic trading and AI-powered credit card features. The move also comes a day after the truck.

Trump accounts mobile app officially launched. Robin Hood serves as the brokerage provider for those account. I mean, fascinating. It's all of those things known before today and before the stock popped 11%. Also, in their last earnings report, Robin Hood said that it was going to cost the money, the development of the app. Right. And they had totally dinged for that. The stock was down 13. The stock went to 70 and change on the fact that they were spending this money for the buildout for the Trump accounts. And here they are back to 90. So it just really does show you. It's a little bit of sort of like AI Ferry dust. It's kind of going through all different sectors. Real stark outperformance I've noticed against Schwab, which is really much more the buy and hold, almost bank-like. And there you see over the

last month, nothing in Schwab, and presumably they should be feeding off at the same bandatics. Let now let's take a look under the hood. We're talking about Ford here, up 18% this week, and more than 46% in May, its best monthly gain in 17 years. The enthusiasm around the stock is centered around the automakers grid battery business and the potential for it to be benefit from AI power demand. This rally prompting two firms to raise their price targets today, Bank of America going to 20 from 17, reiterating its buy rating, Deutsche Bank, sticking with its hold rating, but raising its price target to 15 from 12. The stock still trades at a forward PE of 11, and that is among the cheapest in the S&P 500. But this whole forward energy venture, which was announced, by the way,

in December, is now the impetus for this huge move recently. announced in December, May 14th, I think it was. Morgan Stanley cited it as a potential growth area. The Ford market cap is up about $20 billion since then to $70 billion. And the Morgan Stanley analysts were saying, oh, in like a couple of years, it could be like $300 million in cash flow. Like, it's not commensurate with what the opportunity is. And I think it was the same note. I think it was the same animals who said they could possibly sign a deal with a hyperscaler. And it's like, oh, hyperscaler. Let's tack on the market cap there. Yeah, it's quite fascinating. And by the way, 11 times earnings or whatever it is as a Ford, that's cheap, but GM's at like six and a half. I mean, that's where Ford came from, basically.

So, all right, well, as memory names have soared so far this year, Sandisk and Micron are leading the S&P 500, 600% gain for Sandisk. Meanwhile, the worst stocks in the index, including Intuit and Boston Scientific, the cut in half. There will always be winners and losers in the market, but does such a wide gap tell us something about where stocks could be headed next? We'll look at that. on Closing Bell Overtime. Welcome back to Closing Bell Overtime. We've talked for weeks about kind of narrow market leadership, a lot of day-to-day rotation among sectors and stocks.

Here's a pretty dramatic picture of that. So this is the implied correlation among individual S&P 500 stocks. All it really means is are stocks kind of going their own direction independent of one another or are they moving together? When this is low, it means lots of stocks going their own way. There's not a lot of unified action. Now, that's kind of a good thing. It suppresses volatility.

It means stock. pickers can do okay. When it gets to an extreme, though, as we did, I would say back in July of 2024, as a date I've been watching for a while, because that was kind of a real climactic peak in the short term for Mag 7 leadership. And then you had a correction after that. So we're there, basically. This is a three-month CBO index of this measure. You could also see it in how Mag 7 has not really kept pace very recently. If you see, the average tech stock has soared. Of course, it's all semis. This is equal-weighted technology in the SEP. That's the index itself. that's Mag 7. So obviously we've found other big leaders. You've anointed new trillion-dollar companies.

So it's all good until it gets to an extreme and breaks in reverse. Right. But the hope is that eventually would be hand-in, there was going to be a baton handoff, right? That is exactly right. Yeah. The argument for why this could be a risk is simply that if you get some kind of jolt from the macro or something like that, and then you have all these stocks moving at once, that's going to disturb this trend in the index. But we haven't seen it yet. Okay. Time now for a CNBC News update with Mackenzie Sagalos, Mac. Hey, Mel. A federal judge today barred President Trump from adding his name to the Kennedy Center and temporarily blocked him from closing the center for two years of renovations. In his ruling, the judge said the law is crystal clear that Congress gave the Kennedy Center its name and only Congress can change it.

Trump's name must be removed within two weeks. The order came as a result of a lawsuit by Ohio Congresswoman Joyce Beatty, who was previously a member of the Kennedy Center's board of trustees. The CVC gave an update on the Ebola outbreak today, saying more than 230 staff members are currently supporting the public health response to the outbreak in Africa, including staff that was deployed to the field this week, and agency volunteers sent to airports for screenings. But the agency says that the overall risk to the American public and travelers remains low. And another huge upset today at the French Open, three-time champion in the number three-seed Novak Djokovic, lost in five sets. to Brazilian teenager Jiao Fonseca. The number one seed, the Yonik Center already lost, so that means no one else left

in the men's draw has ever won a grand slam title. Guys, back to you. You should be a good match. Mack, thanks, Mackenzie Segalos. Well, Increase seeing talk lately about a K-shaped economy concerns about how the high price of gas will impact spending by the lower income consumer, but those with higher income seem ready to keep on spending,

especially on travel. Coming up, we'll talk to the sea of Hyatt hotels about its efforts to court the well. healthier travelers. That's coming up on closing bell overtime. Welcome back to closing bell overtime live from the NASDAQ markets. Another record day for the markets, the Dow closing above 51,000 for the first time ever. Also record closing levels for the S&P 500 and the NASDAQ, Dell leading the rally after its results. The stock doubled in May and the optimism spilling into HP and Super Micro as well.

Also big gains in software, Octa up 30 percent, Palantir Oracle, both up about 10 percent today. We're also watching consumer stocks, the discretionary sector, getting a boost this week as oil prices touched their lowest levels in over a month. It was smooth sailing for cruise stocks, Norwegian, the best performer of the three, of more than 12 percent. Airline stocks also flying higher. United posting its best week of the year, while Delta American and Southwest all saw gains of more than 6 percent. I mean, the question I think is, are consumers confident enough right now to book out into the future because we are getting data points that they're waiting to let, they are spending, but they're waiting to last minute to pull the trigger. They have been doing that, a lot more value sensitivity. The stocks seem like the first reflex is oil down. We buy these stocks. And the other piece of it is, I think arguably hotels are not seen as AI disruptable, right? I mean, in theory, I mean, the booking companies maybe. So I think a lot of those trends are gotten us to this point. Now it is a matter of whether you start to see another demand push coming after it. Well, we'll stay with travel. Investors are also warming up to lodging stocks, as we mentioned, including Hyatt, which hit a record high this week. The company has held its Investor Day this week, where it reaffirmed its full-year outlook and announced a new buyback.

Joining us now in an exclusive interview is Hyatt Chairman and CEO Mark Hoplamasey. And Mark, it's great to see you. We'll definitely talk about the investor day, the longer-term plans, but we'd love to hear your take on your business. I mean, your portfolio spans sort of high to low and what you're seeing in terms of demand trends across it. Sure. First of all, it's great to see you. And thanks to you and Michelle for having me on. We are playing in the premium space at Hyatt, so we have more of the high-end traveler, and we're seeing really sustained and durable demand, even through the disruptions of what's happened over the course of this year.

Our premium positioning plus the brand portfolio that we've got and our ability to differentiate the experiences at scale, because we are the largest of the premium companies, I guess, is allowing us to really maintain some momentum in our. in our results. Mark, I want to ask you about AI and how it might impact your business. And there are a couple of legs to that, Mark. And I'm wondering how you view AI agents. Like if I did a search query in Gemini or any other AI chat bot, and I said, plan a trip to Lisbon in June and give me hotel recommendations, how do you make sure that Hyatt appears in those search results?

And do you think it's going to lead customers to book directly with you as opposed to going through third-party platforms? Well, it's a dynamic equation at the moment. It's funny that you mentioned Lisbon because we just opened Anandahs in Lisbon, which has met with a tremendous level of acclaim. So if that's where you're going, please try out the Andaz.

But we were early to stand up our native app within the chat GPT environment. We didn't expect to see massive volumes initially, but we wanted to be on an experiment and see what was happening. And what we found was the customers that are going there, first of all, if you start your search within chat, GBT, you can actually complete your booking within the environment itself because we're embedded. We were the first company to be on that platform that way. And what we learned is that the volume of the traffic that's coming through that are younger.

They spend more on travel. They travel more internationally. and they do more research actually historically looking backwards. So it's a very attractive sort of picture into future guests of ours. And we're thrilled to be on that platform. And of course, we will extend to the others as well. I think it is absolutely underway that the Gentic travel bookings are going to have an impact. And we are, our job is to be present and be able to be found.

and care for those customers who are looking to book travel that way. Mark, a big part of the, I guess, Wall Street response and just a general case for the company is that you do have a lot more room to expand relative to some of your larger competitors. So where are you focusing those expansion plans geographically and then in terms of which change, which part of the market? Yeah, really, if you look at all the markets in which Hyatt has a representation across the globe,

On average, we have four hotels in those markets, and on average, our biggest competitors have mid-teens, 14, 15 hotels per market. So we have a lot of room to grow within that context. The three big geographies that we are looking at are the United States, China, and India. That those three markets have very significant domestic demand, but they also have significant outbound travel into the future. Different dynamics in each case. So in the United States, we are expanding in some lower tiers to fill out markets in which we have no representation whatsoever. In China, we are doing some of that, but we also continue to grow our luxury and full service hotels. And in India, it's up and down the entire offering because the degree to which that market is underserved at this point is very significant.

demographic tailwinds are going to carry that economy forward in a very significant way. So those are the three, that represents half of our growth over the next five years. So that's going to be geographically where we're headed and also continuing to maintain our focus on the premium segments while we fill out the markets that we don't have representation in yet. Yeah, one stat from your Investor Day mark, which was really surprising, was 300 submarkets in the U.S. with no brand presence, which is almost hard to believe in the United States here. But on the international front, I'm wondering how big of a catalyst do you think a World Cup is going to be? You know, it's less than two weeks away before the initial kickoff, before the initial game kicks it off.

And we are in the booking window. So we're encouraged by what we're seeing. And we're especially hopeful that we will see the level of inbound travel that we hope for. There are some points of friction in terms of people coming into the U.S. So we're hoping that that doesn't impinge too much. Mexico City is on fire, which is where the bookings there are truly remarkable. There is a massive domestic fan base that are much more enthusiastic about the global football than maybe many Americans. But that's changing.

So we actually are encouraged by what we're seeing so far. Mark, great to speak with you. Great to be with you. Thanks. Shares of CF Industries were a huge gainer earlier in the Iran war as the disruption in the Strait of Hormuz interfered with fertilizer supply, sending prices soaring. While the stock prices come down, farmers are still feeling the pinch. Coming up, we'll talk to the Secretary of Agriculture, Brooke Rollins. Next on Closing Bell Overtime. Welcome back to Closing Bell Overtime.

Take a look at the cybersecurity stocks, the group outperforming with CrowdStrike and Palo Alto among the top performers in the NASDAQ. Also leading the sector today, shares of OCTA, which soared after reporting better than expected earnings and raising its full year guidance, more than 20 firms raising their price target on the stock. Morgan Stanley noting the company is, quote, new product momentum that will provide additional upside, catalyst into 2027. The stock is up 65% this month. Well, in its earnings earlier this month, Deere saying its farming customers are being squeezed by high fertilizer and other agricultural input costs as oil prices continue to be elevated overall. The USDA now expects farmers to make about $153 billion this year.

That is down year over year. Joining us now to discuss the outlook for ag prices, Agricultural Secretary Brooke Rollins, along with our own Morgan Brennan, live with Reagan National Economic Born. Morgan, take it away. All right, Melissa, thank you. And Secretary Rollins, it's great to be here with you. Oh, thank you.

I think that's where we need to start because you're about to get on stage and talk about this, but that's fertilizer prices and the plan that's coming together here to arrest them. Well, I think that, first of all, thank you for having me. It's such a joy in such an incredible place. There's no doubt, as mentioned, that our farmers are really in the middle of a lot of crosswinds right now. No new trade deals under the Biden administration opening up the world markets right now. We have 24 new deals. Exports will be up this year, working to bring the cost of inputs down. You mentioned fertilizer because of a lot of reasons, not just the current Iranian conflict, fertilizer has skyrocketed over the last five or six or seven years. And part of that is because we started offshoring, like we have a lot of our agriculture for a long time now, the fertilizer itself. So when we used to produce most of it in America over the last few years under the Biden administration, almost half of it moved offshore, making us reliant on countries like China and Russia and others for fertilizer.

So yes, we've launched a massive short-term and long-term plan. We just announced what will be the largest ammonia plant in the world. We fast-track permitting instead of two years, 45 days. We'll break ground on that in a couple of weeks. Have the largest phosphate plant in the world coming in next. We have about 90 plants we're going to start building in the next six months to make sure that, A, America first, be national security, but see our farmers have what they need to produce what they need to feed our country. Yeah, so a big focus here on reshoring in the near term, though, or maybe it's not near term.

I mean, we talk a lot about urea prices coming out of the Middle East and what's going on with the shade of Parmuse. Maybe U.S. farmers are a little more insulated from that specifically, but, longer term, there seems to be a big focus on the planting season we get next year and what that's going to do to crop prices and to farmers and also ultimately to food inflation, this idea that that could be stickier. It could be stickier. But here's the good news. The, you know, the minute this conflict ends, which we should be very close, fuel was down, I mean, almost in some places, $2 a gallon, $2.20 a gallon, that has massive impact on our farmers and ranchers and on the transport of food. Labor for our farmers down 40% because of little changes we made in the wage rate under the

H2A program. Interest rates coming way down. All of the seeds coming down. All of these inputs had started coming down under Trump 2 versus what happened under Biden. Everything was up about 40%. That's going to be a massive opportunity for farmers for food not to basically go where I some people are predicting. And then at the top of that, the president's energy independence agenda basically insulated America. You alluded to this to a lot of the pressures. A lot of countries just don't have fertilizer. We have fertilizer in America, thanks to now we're net exporters of LNG, for example. What the prices are doing, though, is as a result of a lot of these countries, you know, not having the supply they need. So making sure, again, that we're building this out in America will allow us to

mitigate for a lot of that. And then also opening up the markets around the world. This year, we're expecting the highest exports in years for dairy, for corn, for ethanol, for tree nuts. I mean, all of these potatoes, all of these are going way up. And so that's going to help us ensure we're supporting our farmers, but also making sure we're doing what we need to do in the homeland to protect it. Okay. Let's talk a little bit about cotton, too, because you announced a plan yesterday. He's been getting a lot of attention. Yes. So it was in Arizona. Our cotton farmers have struggled. they have not made, they haven't been profitable in almost 10 years. If you think about it, not surprising, you and I probably both enjoy buying clothes. And what has happened is a lot of the clothes

that are being produced now are being produced in China and other parts of the country with synthetic fiber. And what has happened to our cotton farmers is they continue, we've lost 10,000 cotton farms, we've lost hundreds of textile meals. I mean, we've heard this. America has basically completely offshoreed a lot of our clothing. Well, that all changed yesterday. The Great American Cotton Plan we announced. And what's really exciting, it's not just about supporting our cotton farmers, not just supporting plants over plastic, but this really is a make America healthy again pillar. And as Bobby Kennedy and I have worked about, you know, redoing the dietary guidelines, getting more real food on the tables, that's an economic issue for the health care part of this

country. It's a whole other show probably with you. But what we're now beginning to focus on is what people, especially our young people, are putting and wearing, and so much of it is now synthetic fiber. which is now being shown to be bad for people's health. So it is a time for renaissance for cotton in America, and that affects so many states, including right here in California, Arizona, My Texas, Georgia, all the cotton farmers across the country, putting cotton back into the center of policymaking

and clothesmaking in America is going to be huge for our country. Yeah, and you're already starting to see that, especially in like the startup ecosystem around apparel as well. That's right. I got to talk to you about the cattle herd. We're at, what, 75-year lows? are. How do you counter that? And perhaps just as importantly, what does that mean for beef prices at a time where there has been reports? There have been reports that beef tariffs could potentially be lowered. Is that still on the table? So a couple of important points on this. The president is hyper focused on affordability. The American people just struggled so much under the Biden administration. And whether that's fuel or mortgages or interest rates or renting, whatever it is, that everything. got so astronomically high under the last administration. So inheriting that and working to solve for

it, what we've seen in the food area is, frankly, almost every area of food has come down. Berries are way down. Cheese is way down. Dairy milk is way down. Yogurt is way down. Chicken thighs way down. Protein tuna is way down. The couple of outliers are coffee. There's a lot of international reason for that. We don't grow coffee in America. And then the other one is beef. And it's sort of the perfect storm of a lot of different factors. Number one, there was a massive effort, anti-ranching, get cattle off of American land by the left because they believed it caused climate change. And that's actually real. It's hard for me to say that without laughing, but they believe that cow gas, methane caused climate change with them would cause the end of the world. And so as a result, they worked really hard to get cattle off a grazing.

lands out here in the West, et cetera. So that's a massive issue. The second big issue is we've never had a higher demand for beef in American history. And as, I mean, it's unbelievable. It's a protein. It's eating real food. It's making America healthy again. It's getting it back into everyday Americans diets. And so what we see is this massive, almost insatiable demand for beef. So the price of ground beef keeps going up and up, but people keep buying it. The supply and demand isn't exactly working right now. Yeah. So that's a big part of it. And then the 75-year low, we've got drought issues. We have screw worm, the pest issues, et cetera. We have launched a pretty massive rebuilding our herd plan. This one's a little bit different than when the eggs were crazy high about a year ago. You know,

eggs, you have a hen. She lays an egg. We can fix that in about eight weeks. Cattle from birth to slaughter is about two to three years. Okay. So we're just going to have to take a little while to rebuild that herd. But we're looking at every possible tool in the toolkit to make sure that we're putting American ranchers first. That's the president's number one priority, but also ensuring that Americans have what they need to eat and when they need it for protein. But the good news is it's not fuel, right?

There's only one place to get fuel. Protein, you can get chicken, tuna, you know, all the different things, on eggs, affordable egg now. So we're really working hard to build that out, but also making sure we're not compromising our ranchers while we're doing it. All right. Well, Secretary Rollins, it's great to speak with you. Oh, thank you.

National Economic Forum. Thank you so much for joining me. I'm headed to the stage, so great to be with you right before. Thank you. Look forward to it. Okay, guys, I'll send it back to you in studio. All right, Morgan, thank you. Well, big news in private markets this week as Anthropic gets close to a trillion-dollar valuation, passing Open AI, but still paling in comparison to SpaceX. Are these private company valuations sustainable once they go public? And are they inhaling all the oxygen and money from startups? Bradley Tusk joins us next. Closing about overtime live from the NASDAQ market site. We'll be right back.

A decade ago, a private company worth $1 billion was considered rare and very sought after, which is why they called them unicorns. These days, though, it's not about billions anymore. It's about trillions. Anthropic this week announcing a new round of funding, bringing its valuation to more than $965 billion. And it's not just the size. It's impressive. It's also the speed at which it got there more than doubling for months. Turning us now to discuss the ballooning private market valuations is Bradley Tusk from Tusk of Venture Partners. It's great to speak with you. Yeah, hey, thanks for having me. You know, I think it's easy for people to say these are crazy valuations.

In your view, are they based on what these businesses are? They are. Yeah, they are. I mean, look, not every valuation, but SpaceX at 107 times revenue, open AI. I think, you know, 30 times, 35 times revenue. Anthropic, you know, still at like 25 times revenue at least. I'm sorry, close to 50. So it just, yes, these are a really.

really, really big multiples. And the challenge is when you look at the kinds of companies that command really huge multiples on the public market, it's the typically SaaS-type companies that run a 70 to 80 percent margin. And a lot of these companies that we're talking about right now are not SaaS companies. They're companies that have far more infrastructure, far more CAPX, far more OPEX, and just to reach the kinds of valuations in terms of a reasonable multiple, you know, SpaceX has to project to have $150 billion in revenue until 2040.

And that would be if it didn't move at all, you know, a 12x or something like that, that's sort of where the rest of the market tends to be. So it is just really hard to see why, at least when these companies go public, a retail investor would choose to buy in at these crazy, crazy multiples when you could simply sit and wait and just see what happens and, you know, buy it when it looks right. or I guess if you're an investor who invested index funds, you can just get it without even deciding to buy it because that's what's going to happen. And I really do think, but you cite the size of the revenue basis and the multiples on those revenue bases. These are not young upstart companies

anymore. And so I guess it really just starts to look more like a liquidity event than anything else. For the people who work at the company for the BCs who are in them, absolutely. And look, as an early stage VC, although I'm not in any of those companies, I understand the need for liquidity. I want my companies to go public too or have emanating transactions of some kind. So I totally get it. But if I put myself in the shoes of a retail investor watching this show and thinking, okay, in the next few months, I'll have the opportunity potentially to invest in SpaceX, open AI, at some point, anthropic, is it really a good idea?

I just have a hard time seeing how it is. I mean, keep in mind, you're not only talking about, for, let's say, the hyperscalers on the, on the AI front, the multiples and the. and the challenge is getting to that kind of revenue, but they've got fierce competition, they've got tons of regulatory scrutiny. AI is very unpopular. You have all kinds of geopolitical risk.

Open AI has $1.4 trillion in debt that has to get stacked on top of the valuation because that gets paid back first. So there are just so many different risks facing these particular companies that I have a hard time seeing why people would choose to buy the stock. I mean, it's fascinating because a lot of these companies continue to go to market

and raise money even just before their IPOs. And so the retail investor is actually, I mean, at this point, when it goes public, it's going to be the investor of last resort almost. I mean, do you almost feel like they're going to be the bag holder in all this? Well, not just that, but think about if the funds at this point that are investing in these companies, these kinds of valuations, their motivation is very, very different than a typical retail investor. These are mega funds and their entire personal economics are based on their 2% management fee, not their carry, which means they just have to write really big checks at really big valuations to deploy the capital to keep raising more funds and have more assets in their management. So the 2% is even worth more money. And so what motivates them and incentivizes them is so radically different than what should matter to the typical investor who should be looking at the economic fundamentals of a company that you can't say, oh, you know, Fidelity or someone thought this was a really good idea at a $600 billion valuation.

So why wouldn't I, whoever's putting in money at that point, their list of incentives are wildly different than yours. Yeah. And I guess, look, I mean, Bradley, the counter is that the total addressable market is so unthinkably big that maybe it can justify it real quick. Yeah, I mean, I guess so. But that's just sort of said that's working with their that will AI is everything and therefore the total address market of everything is. everything is everything. Sure, I can sell you air as well, right? Like, that doesn't mean anything. And so that only matters to those revenue. Keep in mind, in 2025, Open AI had $13 billion in revenue and $9 billion in losses, whereas, you know, companies that have this bank kind of

valuation are like hundreds of billions in revenue. Understood. Bradley Tusk, really appreciate it. That does it for overtime today and this week. That's when he begins right after this.