Closing Bell - Closing Bell Overtime: Worries hit the AI trade, SpaceX IPO Buzz, and the 2026 Consumer & Fintech Outlook 12/12/25

Episode Date: December 12, 2025

Oracle and Broadcom worries hit tech stocks. Jose Rasco, Chief Investment Officer at HSBC Global Private Banking and Wealth Management, breaks down the week’s wild market action. BTIG’s Robert Drbul gives his top consumer picks—and catalysts—for 2026. Growing speculation around a potential SpaceX IPO with Daniel Hanson of Neuberger Berman. Netskope CEO Sanjay Beri talks the company’s first earnings report as a public company. Wells Fargo analyst Jason Kupferberg on the fintech setup heading into 2026. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

That bell marks the end of regulation, Madison Square Garden Entertainment, and the Harlem Globetrotters, bringing the closing bell at the New York Stock Exchange, served robotics doing the honors at the NASDAQ and stocks are down across the board, the Dow and S&P 500, both pulling back from record levels. The NASDAQ continuing to underperform. The split market reflected in weekly performance, too, the Dow and the Russell with gains of more than 1%. The NASDAQ losing 1.5%. Broadcom down more than 11% today after its results, and Vida also lower. And Oracle's problems mounting as well.

More on that coming up. Consumer Staples, the leading group in the S&P today, Pornell, Coke, Procter & Gamble, gold slightly higher, but silver pulling back, still up more than double this year. Net gas also pulling back after a hot streak into winter down 20% this week. Well, that's the scorecard on Wall Street.

Welcome to Closing Bell overtime. I'm Morgan Brennan, along with John Fort. The recent tech unwind, making some people nervous about the prospects of 2026. The Bulls are the Barrow. Who has the upper hand going into next year? And NetScope shares tumbling about 11.5% a little more after strong results in its first earnings report as a public company. We're going to talk to the CEO about the business and the market reaction.

And IPO, the frinal frontier. Elon Musk seems to confirm that SpaceX is about to take the next step or certainly seriously considering it entering the public markets. That and much more coming up. We begin, though, with today's tech tumble and Christina Parts and Nevelis. the NASDAQ. Yeah, tech tumble, I'm calling it a rough day for tech with concerns about the AI boom, really sparking a broad sell-off. The catalyst, let's start with Broadcom, like you talked about John Down, about 11% despite topping estimates in their earnings report yesterday.

The chipmaker failed to really just ease Wall Street's concerns about customer concentration, AI backlog, just not high enough to buy-side estimates and future margins, with analysts really questioning its reliance on major AI players like Open AI. And that reignited caution across the sector. we saw some profit-taking in memory chip names, Micron, Western Digital, Sandusk, C-Gate all down. You can see Sandusk, for example, down 14% despite posting triple-digit gains this year. So again, keyword profit-taking. Oracle deepened its slide falling nearly 4.5% after yesterday's 11% plunge. The company pushed back on a report that its data center

work for opening I won't be completed until 2028 instead of 2027. That news also hit Neo-Clouds like Corweave, Nebius, they rent out GPUs as a service, often concerned about debt with them, so they tend to fall when the news like that comes out. And then there's Fermi. Shares plunged as much as 35% after a tenant canceled a $150 million deal for its planned AI campus in West Texas. That dragged down data center power plays, names like Aklo, Vistra, Bloom Energy, see a red on your screen.

Bloom, the worst of the bunch, down almost 13% today, Morgan. All right. Well, Christina Parts Nevelas, thank you. As Christina just mentioned, another big drop for Oracle lost 35% of its value in three months. Concerns are growing about its AI pipeline. Sima Modi has those details for us. Hi, Sima. Morgan, quite the day, Oracle denying claims made by a Bloomberg report that some of its data center development was delayed, a spokesperson telling CNBC it's fully aligned with OpenAI and that site selection and delivery timelines were established in close coordination with OpenAI

and that there have been no delays to any sites required to meet its contractual commitments. This was seen as a sigh of relief, those comments, easing concerns. However, there is still open-ended questions tied to Oracle's financing, right? How quickly does the company have to go back to the debt market to raise capital, especially after the company's 10-Q revealed a substantial increase in data center leases? That's showing up in Oracle's bonds where spreads are widening credit default swaps, which we've been discussing, also higher on the week. And Morgan Stanley believes it could continue to move higher if the company does.

was returned back to the debt market, that timeline also continues to be shifted or something that the street is trying to figure out whether it be early 20, 26, John, or perhaps later next year. Yeah, key details. Sima, thank you. Now to the bond market where yields are continuing to move higher, as we just heard reporting the president, is deciding between Kevin Warsh and Kevin Hassett for a Fed chair. Let's get to Rick Santelli in Chicago. Rick. Yes, thank you, John. You know, it's very interesting. The conversation we were just listening to talking about Oracle and debt, well, that's figuring into the Treasury market because there's a competition for issuance. There's only so many investors in the

world. So whether it's AI-related debt or sovereign-related debt due to deficits, there's going to be some competition. And that's really been steepening the yield curve. Let's look, a two-year right now. You see that chart? That's a week-to-date chart. Right now, it's down about four basis points on the week. But as you look to the longer end, well, and threes yields are down, but three year, five year, seven year, 10 year, 20 year, and 30 year, they're all higher on the week. At a 10 year in, it's up five basis points on the week. At a 30 year in, it's up six basis points on the week. A 210 spread at 66, that's the steep in a little less than four years. Two-thirty spread at 133. It's a little bit longer in terms of

it hasn't been that wide in a little over four years back to November of 21. And this is all very important because lots of the technicals on longer maturities look to be higher yielding potentially for the rest of the year. So ultimately, we want to not only pay attention to the AI debt story, we want to pay attention to our own issuance story. And by the way, we'll have a 20-year auction for $13 billion on Wednesday of next week, along with some top year data on inflation and retail sales. Morgan, back to you. A lot to watch. Looking at next week, Rick Santelli, thank you. With only 11 trading days, Left in 2025, Wall Street is wrapping up another very strong year.

All four major averages are up double digits. The NASDAQ is up 20%. This is for the third year in a row. Can this rally continue or will 20206 break the market's recent run? Well, maybe this week can provide a glimpse for evidence of evidence for both the bull and bear cases. On the bull side, we have seen improvement in the breath. It's more than just tech. Financials, industrials, transports, if you dig into industrial, starting to take leadership.

We also got another rate cut from the Fed, both of those coming with the consumer appearing strong this holiday shopping season. Now let's look at the bare case. Fears, the AI trade got ahead of itself, as evidenced by those Oracle reports we just discussed. And yes, the Fed did cut, but it didn't forecast many more cuts for next year, only one on the dot plot. And the bond market is actually sending yields higher, particularly longer under the curve, as you just heard Rick Santelli talk about. Signs of weakening in the housing market. home prices went negative nationally. Add to that, the CEO of RH, saying that this is the worst housing market in almost 50 years. So joining us now is HSBC Global Private Banking and

Wealth Management, CIO Jose Rasko. Jose, it's great to have you on. And that's exactly where I want to start with you, this push pull between the Bull Bear case and specifically why you are firmly in the Bulls Camp looking to 2026. Yeah, and it's sort of scary to see you between that bull and bear, Morgan, I'm concerned for you. But long story short, look, I think if you look, the Fed, yeah, the Fed's probably not going to ease a lot more. We don't have them easing at all. They have the measing. They have themselves easing two more times. Well, we're going to get a new chairman next year. Let's see what happens. More importantly, remember the 90s. The Fed funds rate averaged 5.3%. We had four bull markets and a great tech revolution. So the Fed helps on the

margin, lower rates would help. Higher long rates don't help housing, but they're not going to resolve the housing inventory problem anyway. You would need much lower rates for that. You need more supply. And I think if you look at the market, this steepness in the curve that Rick talked about, that's why we like financials. They make all the sense in the world at this point in the cycle. And when it comes to that tech story, yeah, it is a re-rating of tech, a repricing of tech. And the Oracle story today is fascinating. It's exactly what we've been talking about for months, right? I've been saying for a while that I think tech needs to be reprised because not that the multiples

are too high, multiples are too high given the logistical constraints they're going to have in building out quickly. And more importantly, you're seeing that AI is not a U.S. only phenomenon. It is global. And that's going to push demand even higher. So I want to dig into that a little more deeply here, Jose, because you argue that this AI repricing is not done. Does that result in a rotation into other sectors of the market, as we saw earlier this week,

or a pullback of the markets more broadly, as we saw to a certain extent today? Well, and that's the risk, right? If this goes really wide, we run the risk of markets selling off more broadly. We don't think that's going to happen. I mean, don't forget, earnings were 10% last year, 12% this year, 14.5% this year based on the facts that consensus numbers. So we see not just strong numbers. we see an acceleration in earnings.

And given the price increases, we're going to see in computing and in chips next year, you should look for higher margins than that, Morgan. And more importantly, I think you have an economy that's stable. And there's a mismatch between the equity markets, the overall economy and the labor market. It's no question about it. But let's not forget the asset price inflation we've had as all this money has poured in due to FDI since 2018. That leads to asset price and goods and services inflation.

to some degree. But we think it's stable inflation. So the AI reprises to reflect slower growth in the short term, but the tech cycle expands and the duration extends. Is it really just a logistical constraint issue there when you look at the AI trade? I mean, there's a sentiment shift. It's seen that that's potentially there on whether Open AI, maybe others, are good for the money in three or four years based even on demand, right? When you're projecting billions, hundreds of billions of dollars worth of spending based on what demand for their product is going to be, that's quite a story to have to live up to. Is there a whole market impact based on that kind of projection of what the demand's going to be? Well, John, you hit the nail on the

head. If we're going to spend trillions building data centers so I can write term papers more quickly, we just wasted a lot of money. That's not what AI is. AI is a productivity enhancing tool on both sides of the balance sheet, LLM models were the entry. They were that entry point. It's like plugging the computer into the phone line. That was not what the internet was about. The stocks that are going to be the AI winners, we haven't even produced those companies yet. I think this is a multi-year tech revolution. If you look at empathetic AI, look at agentic AI, look at what that's doing to both sides of the balance sheet. It is going to be revolutionary, and well worth the expenditure.

Now, we do run the risk of an overbuild, right? That's always the case. And on the margin, you'll probably see some of that in three to five years, no question. But the overall spend well worth it and a lift productivity. And remember the Amazon effect from the last cycle, right? Amazon was killing the retail economy. And we did lose 300,000 jobs. We added more than a million in logistics, distribution, warehousing, and real estate,

higher value added, higher paying jobs, and they push multiples higher. I think that's the key here is we have to be patient. Right. Yeah. And as this goes global, it creates more of that logistical problem. Well, we'll watch it, Jose Rasko. Thank you. Thank you.

Coming up, why the World Cup could be a major driver of consumer spending next year. And one analyst says this mystery stock that we're showing you right there on your screen could be on its way to a trillion dollar valuation. What is it? We're going to tell you after this break. Overtimes back in two. Welcome back. That mystery chart.

We showed you just before the break. Well, take a look at this. Shares of GE Aerospace, getting a nice boost today at 4%. And in a note about the defense and aerospace industry, Citigroup says that stock could hit a trillion dollars within five years. The current market cap is just above $300 billion. The analysts saying the sector is at the center of a number of megatrends, multi-year growth drivers, not dependent on the economy, both on the commercial and defense side.

So this includes air travel, drone missile technology, the growing space economy, Boeing expected to be another beneficiary, according to Citigroup, as well. And you can see shares of Boeing also up 2% today. Indeed. Now let's turn to the consumer, Lulu Lemon closing out the day, as the top stock in the S&P 500 after Calvin McDonald announced his departure as CEO, but it's still one of the worst stocks in the index this year. Another consumer stock that had a rough year is Nike,

one of the major laggards in the Dow, down 10%. Now, despite the underperformance of the ass leisure trade, Nike remains one of the top picks of our next guest. Heading into next year. Joining us now is Robert Durbel, consumer retail analyst at BTIG. Robert, how much of this Nike call in particular is about its new CEO gaining traction in a turnaround? How much is about consumer strength overall? Hi, John.

I think overall it's a little bit of both, you know, from our perspective, you know, I think Elliott Hill is definitely laying the right foundation for the turnaround. But we're definitely very measured in terms of how quickly it can happen. But when we think of where the progress that they're making with the focus on innovation, when you look at 26 and you think about the sporting events of the Winter Olympics followed by the World Cup in the summer, we think these key sport moments tend to be pretty big opportunities for the athletic space, including Nike, throw Adidas in there as well. But we just feel like this is a company that is on its way with the recovery.

we think that 26, you know, we should start to see a lot more tangible evidence of the progress. A lot of questions in next year on the stimulus end, as well as the tariff impact end. As you look at TJX, which has been a very successful, very savvy kind of off-price retailer, how do you tell that story through TJX? Well, TJX has been amazing, and I think that, you know, from the terror situation, One of the things from TJ's business model is the tenure of their team. So when you look at the history of the players, the executives, the team, the sort of the way that they've been together for so many years, during all this turmoil, when they talk to their vendors and their sourcing partners, they said, listen, let's not do anything crazy. You know, we're going to be here.

We'll manage for this together. Let's not do anything stupid. And when you look at the numbers for the TJs put up, you know, in that last quarter, the size of this company, company, six percent, you know, the results have been spectacular. And I just think that this is a company that's in its own class. This is a world-class management team, very cohesive. The consumers love the treasure hunt. Consumers love value. And they're winning both in apparel.

They're winning at home. And we expect that to continue, you know, tariffs, no tariffs. You know, this is a company with a tremendous merchandising acumen. You know, if I just look at your survey results here, I mean, brand strength, brand awareness seems to be a direct relationship to how much companies can take pricing power and what that means headed into 2026. So with a name like Nike that reports earnings next week, how much does that set the stage for what we can expect in 2026, especially amid some of these tariff dynamics and inventory restockings? Well, in the pricing survey, what I would point out is that within Nike's brand portfolio, when you look closely at the Nike brand, at the Jordan brand, at the Congress brand, these are some of the top strengths around the ability to take price.

So when we look at the billion five of tariff costs that Nike has highlighted, and you give this company some time to affect change within their sourcing organization globally, we think over time between pricing and the way that they manage the sourcing, this is manageable. And the pricing power, like, you know, one of the biggest things within Nike overall from our perspective is when the value is there and the fashion is there, the consumer responds to it. And so, you know, when we look at Nike, there's a focus on innovation, but there's also this fashion aspect of what they're trying to do. And, you know, one of the shoes that we think is interesting heading into 26 is the Cortez. you know, I think it's 1972 shoe and it's catching some interest. And when everybody focuses on, you know, the innovation pipeline. But I think a lot of times some of the biggest shoes, you know, within footwear can be sort of vintage heritage retro type shoes. Winter Olympics, World Cup, going to be a big sporting event here. I always think about the impact of that on media rights. But what does it mean for retailers?

I think in athletic, it tends to be a very strong driver. You know, it creates a lot of interest. You know, Summer Olympics are definitely more important than winter Olympics, but from like a brand heat perspective and, you know, a brand focus, you know, there's a lot of opportunity to showcase. And you look at Nike, you think about, you know, throw Ralph Lauren in there and the success that they've had, figs with their perspective of the U.S. medical team around, you know, the Olympic pieces of it. We get into the World Cup, you know, the last time we did this, I think Adidas just around a billion dollar revenue number around the World Cup. hasn't really thrown out a number, but when you go back to the last World Cup, the last World Cup sales in footwear, I think we're up 25% for the size of Nike. And when you think about the opportunity, this is the first time in 32 years at the World Cup's in the U.S. And I think it's a big opportunity for the industry. And I think Nike will put some marketing muscle and some

dollars behind it. And we think it should have a positive impact on the industry. And I think Nike should be a big beneficiary of it. All righty. Robert Durbel, thank you for joining us. Thank you, Martin. A day after the S&P 500 and the Dow hit record highs, stock sold off today, took a breather, AI fears. As the Bulls and Bears continue to play tug-of-war with a tape, Mike Santoli is looking at what the next move could be. And we'll be talking with the CEO of cybersecurity company, Netscope. The stock falling today, despite a beat after its first report of a public company. Over time, we'll be right back.

Welcome back. Senior Markets commentator Mike Santoli joins us now with a look at the current market sentiment, And what could come next for stocks? Mike? Yes, Morgan. So Bank of America's Michael Hartnett has long maintained this bull and bear indicator. It's made up of objective measures of institutional investor positioning, fund flows, credit market technical conditions, things like that. So not attitudes or opinions, but risk posture based on all this data. And it's kind of recently crossed above into this extreme bullish sentiment reading. That was back in late October when the previous stock market high was put. in. When we have gone above that extreme bullish reading, it is often given a decent signal

that the overall stock market was ready to cool off to some degree, whether it was just a tactical correction or something worse than that. However, not foolproof. I do want to point out this was December of 2020 when things started to look a bit overheated and the market just kept barreling higher into the first part of 2020. And although the riskiest parts of the market peaked about two months later. So just something to keep in mind as we try to figure out the field position here at your end. Interesting. How closely you're watching the VIX right now? VIX is interesting because it started to bleed lower, as you might expect, going into some holiday interrupted weeks and the market was at a high and all the rest of it. We have perked up. I see a couple things. Obviously,

turbulence in the AI trade is part of that. The indexes are moving a little bit in wider ranges. But also, we've got some pretty good macro data coming next week in terms of delayed jobs and inflation numbers. That's unusual in the second half of December to have consequential numbers like that. a feeling that's another reason that the VIX had a little bit of a bump today as people maybe get a little more hedged up. Well, see if it stays jumpy. Mike, thanks. Time for CNBC News update now with Julia Borsden. Julia. John, the Justice Department asked an appeals court to block Judge James Boasberg's contempt hearings next week and remove him from a case involving the Trump administration's use of the Alien Enemies Act to deport Venezuelan migrants back in

March. The government accuses Boasberg of leading a radical, retaliatory, unconstitutional campaign against administration. He had ordered the contempt hearings to determine whether the government defied his orders to turn the deportation flights around. The Transportation Department is threatening to pull $73 million in highway funding for New York State. If it does not address allegations, it allegedly improperly issued commercial driver's licenses to non-U.S. citizens. The department tightened the rules for non-citizen drivers in September, citing three deadly crashes, it says, were caused by migrant drivers. And in a rare health update today, Britain's King Charles said his cancer treatments can be reduced in the new year, nearly two years after he first

shared he had an unspecified form of the disease. The 77-year-old said his improvement was due in part to his early diagnosis. Back over to you. All right, Julia Borson, thank you. Check out shares of Planet Labs. Up again today, another four, four and a half percent. Give nearly 50 percent on the week. Now Elon Musk indicates SpaceX could be going public soon. Could that IPO keep these commercial space stocks flying high? We're going to dive into the space trade because that is what it is next on overtime. Welcome back to overtime. Stocks cooling off today, both the Dow and S&P 500 pulling back from record highs at yesterday's close. The NASDAQ, down about 1.7%. Broadcom's earnings, the leading cause of today's tech tumble,

also continued concerns about Oracle as it loses another 12% this week. Now, two of the hottest areas of the AI trade, data storage and power, also pulling back, that sand disk and Western Digital, which is still up nearly 4x this year, topping the S&P 500. On the power side, check out Fermi. It's down 33% after it loses a funding commitment from its first major. tenant. Energy, the second worst sector in the S&P after tech. Every name in the group was lower with Texas Pacific land, the biggest decline. Well, it was a down day for the broader markets, but a high altitude week for space stocks. Planet Labs and rocket labs both soaring this week. Planet

finishing up more than 40 percent. Rocket labs more than 25 percent. Firefly and intuitive machines also higher Echo Star up double digits as well. Echo Star is up almost 500 percent in six months now this amid strong earnings from planet but also perhaps more significantly reports that SpaceX is considering going public next year. Elon Musk replying to report on X saying SpaceX will IPO soon seemingly confirming the reporting of Ars Technica specifically. Joining me now is Dan Hansen, senior portfolio manager at Newberger Berman, who oversees the quality equity fund. It has about a 5% of its assets in unlisted shares of SpaceX as of the end of last month. And Dan, it's great to have you on. Welcome.

Thanks, Morgan. Great to be with you. All right. Let's start there. SpaceX IPO, potentially in the cards for next year. Your thoughts? Yeah, we think the time has come. This business is founded in 2002. So 23 years in business, it's an industrial juggernaut with two business units, the launch business and the communication Starlink business, each of which juggernauts multiple billions of revenue, cash flow, earnings, and we're pleased to be shareholders. Yeah. And then there's also Starship, which they're continuing to build and develop, too, which would be a massive extension to the launch business. So much of this is centered around and this idea that SpaceX and Elon Musk, as the majority shareholder of SpaceX, considering taking the company public, is centered around the possibility of data centers in space. How big is this possibility? And what does it do to turbocharge not only space exploration, but also settlement? And then, of course, AI ambitions, back here on Earth. Yeah, that's all very exciting and was all part of our thesis in becoming shareholders a number of years ago. But what's really exciting in breaking news was over the weekend, Musk posting that the

ambition to accelerate the path in the coming three years for data centers in orbit to make that a reality, which motivates the IPO and the use of proceeds in terms of raising tens and billions. They don't need these proceeds to run these existing business, but to accelerate the opportunity for data centers in space would be a use for that capital. It's interesting. I just talked about Echo Star before. The stock's up almost 500% in six months. Big reason is because they've become a meaningful shareholder in SpaceX through cash and stock deals to sell so much of their spectrum for Starlink. I mean, is this a name to be considering as well that's already public or for that matter some of these other commercial space names that seem to be getting

lifted by these IPO reports? Yeah, I think it's important. And at the quality equity strategy, we take a very disciplined view. We love businesses that have, you know, entrepreneurial founders that have an ownership attitude, that have a unique mission, create value for their customers. SpaceX meets all that test.

But we also need to look for valuations that are supported by the fundamentals. So what's exciting about SpaceX is they have that sizzle of opportunity and growth, but the fundamentals support the valuation, case in our view. Yeah. What do you see as the valuation here going into an IPO? Well, the reports of, you know, the current tender was accomplished at $800 billion. We think that reflects the existing business assets, the launch business in itself, multiple billions of revenue and profits

and cash flow, the existing Starlink business. I wasn't on a United Flight yesterday. It was a narrow body embryo and it had seamless digital access and productivity through Starlink service. Today, you've got upwards of 9 million subs, they're getting that service through 8,000 satellites in LEO today. So these are existing businesses that are driving the fundamentals and supporting that $800 billion evaluation. But to your point, the upside from incremental innovation, Starship, I was down in Texas for the October launch of Starship 11.

We see that as meaningful incremental upside to the valuation and the opportunity. And ultimately, that lift capacity is going to be what enables. data centers in space, and a whole other leg of upside as a public entity. Yeah. Dan Hansen of Newberger-Burman. I've been talking about this for a long time, but now it seems to be here, and it is a conversation for Wall Street and Main Street as well. Appreciate it. Thanks so much. Well, shares of cybersecurity firm NetScope, which recently went public sinking. Despite better than expected results and guidance, we're going to hear exclusively from the company's

CEO next. And it's been a rough year for fintech stocks. But coming up, we've got an analyst set to reveal his list of the fab five Fintech stocks to own for next year. Welcome back to overtime NetScope falling despite reporting revenue beat after strong full year guidance. Despite the dip, the stock's still up from its IPO in September. Joining me now on a CNBC exclusive is NetScope founder and CEO Sanjay Barry. Sanjay, good to see you. Yeah, great to see again, John. So 34% year over year, rise in annualized recurring revenue, more than 1,000 customers. What's driving the adoption of your various products in the latest quarter?

Ultimately, as people adopt more cloud and they adopt more AI, they need to secure that. They need to say yes to cloud and AI in their organizations. And we're the company from a security and networking perspective that lets them say yes. And so that's a big driver. The other one, to be frank, John, is awareness. We have an amazing win rate when we can get into a customer and talk to them about what we do. And so, frankly, one of the reasons we even went public was to raise that awareness. So we get more at-bats, and that's been a driver as well.

You got a collection of more than 20 products, I believe. You say 53% of your customers are using more than four products, 26% more than six. What characterizes the ones who are using more products? Usually that's a very good impact on net revenue retention. Absolutely. So we're a platform, and we try to converge and consolidate what used to be called data network security, one of the biggest markets in networking and security. And customers, mid to large enterprises, and we deal with large enterprises across the board,

they stair step into the platform. They may start and say, look, I want to secure cloud. I want to secure web. Now I'm going to enable and secure AI. Now I'm going to modernize my network, and so it's a natural path. They start with three or four, and then they grow over time. And the focus for us is make it easy. Make it easy for them to adopt more. The implementation time is short as you adopt more. There's a lot of talk about the shift toward inferencing in AI away from just training these models on corporate data toward using the models to actually make decisions to deploy agents in the enterprise. As that deployment happens, to what degree do you expect that to be

a driver of further adoption of NetScope? And do you have a rough estimate of which quarters you expect that to kind of show up in? Yeah. So first of all, we see all that inference traffic. For many of our customers, we are their new network. We're the on-ramp to the internet, the on-ramp to open AI, the on-ramp to Claude Code. And so we see it. And so it's natural. They come to us and say, well, look, I need you to put guardrails around it, around that inference. So if I'm in a healthcare company and it says, hey, I need you to reformat this PHI for me. Well, you probably don't want to do that to a public LLM. And we are the company that will stop that from. happening and coach them to say, hey, look, do that on your private LLM. And here's the on-ramp to that. And so we're starting to see that already. Over a thousand customers of ours are using us to enable and protect generative AI. But we're really in the first inning. John, you may not know this, but 90% of AI usage in a company is shadow. It's not owned or corporate IT is saying it's it's procurement or an engineer bringing it in. And so making sure you understand and know

that that's happening and can say yes, but put these guardrails, that's a very big trend, and that's really why we're brought in in many cases. Sanjay, a lot of times investors sort of lump all of cybersecurity together. You guys have a technology alliance with CrowdStrike. Explain, if you will, how that works. Yeah, sure. So in security networking, I'm not a believer, and neither are CIOs that you need one platform for all of security and networking.

You don't want 100, but you don't want one. and you get the best sort of of nothing, if you have one. And so you need a few. You need a few core platforms. One of those is CrowdStrike and your EDR platform, right, your endpoint platform. Another is your identity platform. And another is what we do, which is the evolution of data network security, right, governing your data, threats, putting guardrails around it, called Sassy.

And so what we do is we make sure we integrate with your endpoint system and your identity system, share for that customer data so that they operate better, one plus one equals three, and promote an open ecosystem. And I think that's what enterprises want. We have a common enemy, and the enemy is criminals, nation states, malicious insiders. And so we've got to make sure that these platforms interoperate together to fight that common enemy. Put you in an interesting spot. Sanjay Berry, Netscope founder and CEO.

Thanks for joining us here. Thanks, John. Excuse me. This mystery stock has been, excuse me, dead money for investors this year. But it's one of five fintech stocks. Our next guest says investors should be buying for next year. He reveals the full list straight ahead. And later, I'll look at all the big earnings that need to be on your radar next week, including Nike and FedEx.

Overtime, we'll be right back. Welcome back to overtime. Check out shares of Roblox. Big loser on Wall Street today, down about 6%. J.P. Morgan, downgrading the stock from my own. overweight to neutral, cutting its price target from 145 to 100, citing valuation and headwinds including slowing bookings growth and margin compression. Roblox shares, though, still up more than 50% this year. Well, it's been a rough year for fintech stocks. The global fintech ETF is down

2% on the year with names like Block, PayPal, Shift 4, all plunging. But our next guest sees attractive opportunities in the sector heading into 2026. He joins us with his fab five of fintech Wells Fargo analyst Jason Kupferberg. Jason, it's great to have you on. Welcome. Great to be back with you. So before we get into the Fab Five, why has it been such a bad year for all the fintech names? Because it seems pretty broad-based, no matter where their business actually lies.

You're right. It's been a very difficult year for the sector, arguably the worst year in history for these payments, stocks. We think the number one reason for the underperformance is that the payments sector sits at the intersection of tech and financials. We've seen tech investors for most of this year chasing the AI stocks. We've seen financials investors buying bank stocks. That has led to rotation of capital out of payments and fintech into these other sectors. And we think that's been the single biggest issue. The reality is most of the companies, with a couple of very minor exceptions, have actually

performed quite well and have been executing against their guidance this year. So the Fab Five of FinTech, what are they? They are Audion, Affirm, MasterCard, Toast, and Visa. And how do you look at some of the smaller FinTech companies that are even shifting towards stable coins, the likes of Remitly dealing with global remittances, how much did they factor into the way you look at the shifts and opportunities emerging in fintech in 26. So that's not a specific stock that we cover, but what I would tell you about stable coins specifically is that we do think that they will have a material role in the global financial

system over time for select use cases. And what I mean by that is I don't foresee an instance where particularly in a country like the U.S., where the existing payment system is very much. and consumer habits are entrenched, that people are going to go to the point of sale and buy a coffee with a stable coin. However, when we're talking about cross-border money movement, we think that there's a lot of efficiency that can be achieved and costs that can be taken out via the use of stable coins, and a number of the companies that we do cover are laying the groundwork to take advantage of that long-term opportunity. A decade ago, there seemed to be this narrative that crypto and what's emerged as

stable coins would be a threat to the power players like Visa, like MasterCard, in the market. Now it seems that narrative might have shifted toward being more of an accelerant for them. How do you look at it? I'd agree with that premise. If you go back even just six months ago, there were a couple of headlines that scared people about the implications of stable coins from MasterCard and Visa. However, MasterCard and Visa have an incredible track record of innovation, of anticipating changes in the market. They did it when e-commerce came into the fold.

They did it when mobile payments became popular. And we think that they're doing it again with stable coins, as well as with agenta commerce, and we think that they will be right in the middle of the most critical use cases for that technology. What do you see the biggest impact being on commerce itself? I mean, right now we have some commerce moving in. into these LLM environments where you can buy stuff through Walmart, through chat GPT. Once you add in some of these payment accelerants,

what happens? Are more people able to buy more things? Do payment decisions and payments happen more quickly? We think that it's probably an evolutionary process. So initially it'll be AI-assisted shopping. You use the LLM for discovery, you decide what you want to buy, and you go through the checkout process via the LLM rather than the merchant's website or the merchant's app, but the consumer is self-guiding themselves through that checkout and payment process.

Ultimately, a subsequent phase could be more of a pure agent-led model where the consumer is essentially giving the agent the power to go out and not only shop, but pay for the goods and or services that the consumer is looking for. But again, we think it'll be a multi-step process that will play out over a number of years. Don't know if I'm ready to hand my wallet to an agent. We'll see. Jason Kufferberg from Wells Fargo. Thank you.

Up next, Mike Santoli looks at the great rotation away from AI tech names and why it could make for a bumpy ride for Wall Street. And don't forget, you can catch us on the go by following the closing bell overtime podcast on your favorite podcast app. We'll be right back. Welcome back to overtime. Let's bring back Mike Santoli for a lot. looks the rotation away from the AI trade, whether that shift could get bumpy. Mike. Yeah, John, so there's lots of ways to portray this rotation. Here's an easy one. Nasdaq 100 relative to the Dow Jones Industrial Average. You see they really gapped out pretty far by late

summer and now kind of coming together. You see them actually going in opposite directions as opposed to just going up or down at a different pace. This did also happen back in late August for a little while. So just because we get one of these times when they converge doesn't mean it's destined to cross over. You can certainly see a re-rotation back, but it does show you that the market is trying to sort of isolate exactly where the better prospects are heading into 2026, the old AI trade, or some more cyclical industrial areas. Take a look, though, at the representation of the biggest seven stocks in the market over time. This is from Goldman Sachs market cap. You see, it's up around 35 percent right now, and it's also around 25 percent of S&P 500 earnings. So a couple

things can happen. The valuations can compress. Those two numbers can come down. That would probably weigh on the indexes. The other stocks could have their earnings revisions and earnings growth accelerate. That's supposed to sort of start happening, but it's unclear how much of the slack they can take up. Look, everything could work together. You can get one of these harmonious rotations, or maybe everything works at once. But I always say, like, be careful what you wish for when you have the large segment of the market. You want money to come out of there and go in other places. It sometimes doesn't happen in the cleanest manner, John. Yeah, Mike, I keep thinking of 25-ish years ago when there were all these questions about whether the internet would

live up to the hype. I think it has beyond wildest expectations, not just in PC, smartphones. Now we're talking about this AI stuff built on top of it, but there was a period of several years in there where the market hated the internet and software. I mean, there's the chance that that could happen here, no? It could. One counter to that you hear is that we're all ready for this right now. It's going to be on the devices we already. have as opposed to people having to be brought online. But no, I'm with you on that in terms of how the market's capitalizing things today versus how they eventually evolve. All right. Mike Santoli, thank you. Have a good weekend. You as well, thank you. We've got some breaking news out of Washington.

Amon Jabbers has that story for us. Hi, Amon. Morgan, this is reporting from the Wall Street Journal just popped a couple of moments ago. The journal is reporting that according to U.S. officials talking to the journal, the United States raided a ship in the Indian Ocean last month. that was bound from China to Iran, interdicted that ship because the theory was from U.S. intelligence that that ship had parts on board that were intended for the Iranian weapons program. So that is another operation on the high seas.

This one now a month ago, but of a Chinese ship destined toward Iran. The Wall Street Journal reporting that this was several hundred miles off the coast of Sri Lanka when U.S. operatives boarded the ship, confiscated the cargo, the vessel proceed on its way. The U.S. had been tracking the shipment, the Wall Street Journal report. So now we have the information about the ship out of Venezuela with the oil, and now this,

a previous instance, in a separate case, in a separate ocean, but aggressive maritime tactics by the United States military. Back over to you. It certainly speaks to Amon, this notion of reestablishing, reinforcing, and expanding deterrence from a U.S. perspective here. I don't even know the last time that we've actually intercepted seized cargo from a Chinese specific ship. So how significant is that, given the tensions or maybe dying down or dialing back of tensions that we've been seeing in terms of trade talks between the two countries? Yeah, one question I'd like to know the answer to, Morgan, is did this happen before or after that Busan meeting between President Trump and Xi Jinping? And then also, you know,

how much thought was put into that must have been an enormous amount to how much this would provoke the Chinese by going after a Chinese shipment here. Yeah. I think it also speaks. to the increasing role of defense tech and space tech when it comes to that notion of deterrence as well, although we don't know who was involved, but I can imagine. Image Avers, thank you. You too have a good weekend. You bet. Huge week next week from a macro perspective with all the data.

We also get some key earnings and, by the way, a flurry of central bank decisions. Big questions about the AI trade as well. We're wondering if Broadcom would rescue Oracle didn't happen. Yeah. We look to Micron now next week. That does it for us here at overtime.