Closing Bell - Closing Bell: Tech IPO's in 2025, Tariffs Taking a Toll? 02/14/25

Episode Date: February 14, 2025

From the open to the close, “Closing Bell” and “Closing Bell: Overtime” have you covered. From what’s driving market moves to how investors are reacting, Scott Wapner, Jon Fortt, Morgan Brennan and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business.

Welcome to Closing Bell. Scott Wapner live from the New York Stock Exchange. This make or break Friday begins with Meta's monstrous March. On track today for its 20th straight day of gains. An unprecedented move by almost any metric, certainly for a stock this size. We'll track its every move into the final stretch here as star analyst Mark Mahaney tells us how far it can go from here. In the meantime, let's show you the scorecard with 60 to go in the week. Stocks right around a new closing high.

We're about one point below it on the S&P. Pretty resilient, giving the news of the week between inflation and tariffs and concerns about the strength of the consumer with retail sales. Apple and Nvidia also stand out this week for a tech trade that's looked a bit better lately. It does take us to our talk of the tape. Surging meta, a big reason why the comm services sector is just ripping this year. Let's bring in Evercore's Mark Mahaney for more on where this all might go. Welcome back.

Hey, Scott. Happy Valentine's Day. You as well. You know, we talked about this with you on the day that meta was going to report its earnings. And this thing is a rocket ship. What have you ever seen anything like this? I guess I have. I mean, I'm not sure 20 straight days, but, you know, you do get these companies occasionally get these this momentum and they're going through a re-rating. So my pitch here, I think, is what's going on with Meta. It's going through the great Internet utility or tech utility re-rating. For years, you had Meta always traded at a discount to names like Microsoft or Apple

because it was perceived to have a lot of end risk. There'd be another, there'd be a TikTok or something else would undermine the fad. So there was always this kind of end terminal value risk. And then there was regulatory pressures on the name. And then there was all these AI investments the company was making with uncertain returns. And I think each of those has kind of been addressed over time. And so the multiple has gone from 15 to 20 to 25. And now we're getting up there 27, 28 times. I think it can support that. I'm not sure the multiple goes that much higher. To me, in my book, this is just a compounder. Stock goes up 20% because the earnings go up 20%, not because you've got a re-rating opportunity. So I continue to like

the stock. I just don't think there are other names that I think would give you more upside from here. What's the historical average on the forward PE here? It's about 22 or 23 times. It depends on the cycle that you look at. So that's probably over the last three years. And again, you know, you went through when we had the crack in the stock in September of 22 on that miserable September quarter when Zuckerberg talked about expenses to the moon, no discipline. The stock was, I think, was at $90, got that low. That multiple was 12 or 13 times. So you've seen the stock's done phenomenally well, in part because the multiple has more than doubled since then, but also in part because you've had phenomenal top line and bottom line growth. I mean, they clamped down on expenses,

that the year of efficiency turned into years of efficiency. And then they've still got these kind of interesting new option plays out there. I think with things like threads, meta AI, maybe Facebook marketplace. So there's still things, monetization levers that are still on the come with this company. How patient is the market going to be for return on investment on AI spend? I mean, the CapEx numbers across the board are obviously, you know, huge for all of these names. Now, meta, I don't think is spending as much as some of the others um in the space but still you know the market at some point is it going to get a little antsy for a return sure sure it will

i think that market's been antsy in the past just so you know the numbers i mean they're going to spend something like 65 billion in capex this year that's actually ballpark close to uh what uh amazon aws is spending uh and probably what what Microsoft is spending in Azure. So it's intriguing and what Google is spending. But of those four companies, there's only one that doesn't have a cloud business, and that's Meta. So it kind of raises the question of why are they spending so much? They have been able, however, to use AI. I think they've been able to demonstrate it to improve the platform for both users and advertisers. Return on ad spend has been rising and consumer engagement has been rising.

Their recommendations have gotten better because of AI. And maybe the last kind of third win out of AI for Meta is it's allowed them to keep their headcount relatively modest going forward. It's kind of like what I call a capex for humex trade, more capital expenditures, less human expenditures, i.e. less dramatic ramp up in the headcount. You say in the note that you've always viewed Mark Zuckerberg as largely apolitical. I'm wondering what part of this move in the stock, if any, might be related to his perceived move to the right, at least as it relates to his relationship with President Trump? Well, I've never actually had a conversation with Zuckerberg about politics, but just having read and tracked him over the years,

I've never known him to take publicly any strong positions one way or the other. I think the strongest position he ever took was at that Georgetown speech. I forget when that was, 2018, 2019. I think he's always struck me as being a kind of a proto-libertarian when it comes to free speech. We had a lot of debates and a lot of very unusual events that happened in 1920 and 21 that really challenged that. But I think he's back to his core. And yeah, you had a you had a company that was widely distrusted, perhaps at least by political leaders. And even as recent as I think President Trump referred to Facebook or Meta as the enemy of the people. But then somehow that the leader of the enemy of the people got invited to the

inauguration. And so I just think what you have with Zuckerberg is somebody who's relatively down the middle, the fairway, I think, and staying away from almost all political issues and is doing what every CEO should do, which is you stay in good terms with people who could influence your business. It just seems like he's savvy and he's sticking to his knitting and he's done, I think he's done largely the right things when it comes to the PR side. Whereas a few years ago, he seemed to have much more of a to have a tin ear towards those kind of issues. Oh, interesting. It wasn't lost on me, too. You know what you said at the outset while we're sitting here marveling at Meta's move. You said you do believe there are other better bets elsewhere at this point because the

multiple has just gotten more rich. Like what? Well, my favorite stock right here is Uber. I call this DHQ, dislocated high quality. You know, we had this robo taxi roadkill overhang on Uber. I think that's going to dissipate over the next 12 months. I think there's enormous move for re-rating the multiple going up. That's how you make most money in these stocks. It's when you get the point where the multiple can go up and the estimates can go up. You get that dual trigger or whatever, the way for the double-barreled approach to stock upside. I also prefer Google. This was a switch for me about three months ago.

I just think there's so many overhangs on Google now, whether it's regulatory, AI, lack of cost discipline, and all those may well be valid, but I think all of those are addressable. And if you get any one of you, one or two of those addressed, I think there's a fair amount of upside that the re-rating that we saw with Meta could actually happen to Google. So I actually prefer Google here to Meta. It's the first time in about two years I've had that opinion. Wow. You know, before I let you go, I want to hit on Airbnb and Roku, both of which you rate in line, which are absolutely ripping today. Both of these on the back of their earnings. Do you need to think about a re-rating on these stocks? How are you thinking about them today?

I always think about re-rating on these stocks or a down rating, too. Online travel has been extraordinarily strong. Surprised everybody. We heard from Expedia and Airbnb. I think we're going to hear the same thing from Booking next Thursday when they print earnings, that the read-throughs to Booking are really good. I think the highest quality name in the group is Booking. Probably the lowest quality, but you get it at a really good discount, is Expedia.

Those are the two stocks I prefer to Airbnb. Airbnb carries this multiple that's 30 times earnings. It's got far and away the highest multiple, but the growth rates are the same. So as fundamentals converge, I think the multiples converge. I'd rather play booking and Expedia. But what Airbnb is doing, I mean, it's a unique asset. It's one of what I call the electric 11. It's a high-quality asset I want to buy on a dip.

There's no dip now. The numbers were better than I expected in the quarter. So I give them full credit for that. And if there were a correction on the stock, yeah, I'd probably get more constructive. But right here, right now, I prefer Expedia. I prefer booking. All right. Good stuff. Good to talk to you. We'll see you soon, Mark. Thank you. Mark Mahaney. Thanks, Scott. Joining us once again. NVIDIA, by the way, having its own big week. Christina Partsenevelos joins us now with more on that move, which has been pretty good in its own way, right? Yeah, because NVIDIA shares are finally breaking out of their 2025 slump. After climbing, went more than 5% this week, and it was pretty much trading flat all year, all year since January.

The stock had been held back, though, for two main reasons. Potentially, number one, potentially tighter export controls under the Trump administration following DeepSeek's recent breakthrough. That's when you really saw the stock drop in mid-January. And production challenges. That's point number two with NVIDIA's next generation Blackwell chips. These supply chain worries led Mizuho analysts, for example, to project just inline results for NVIDIA's upcoming January quarter. That's going to be, we'll get some more details on February 26th. But the outlook is improving. HP Enterprise has now shipped its first Blackwell-based product, while AI server maker Supermicro is forecasting surging demand for 2026, a strong signal for future NVIDIA chip sales.

Meanwhile, NVIDIA's investment arm has been reshuffling its portfolio. The company's latest filings show it did indeed cut its stake in arm holdings by 44% to 1.1 million shares and completely exited positions in Nano X Imaging, CERV Robotics, and SoundHound. SoundHound shares actually falling about 29% today on that news. But NVIDIA is also placing new bets, acquiring 1.7 million shares in self-driving tech company WeRide, which has soared today over 80%. That's share price. And then also taking a $1.2 million share position in AI infrastructure firm Nebius Group. That share's stock is also up about 5%. Keep in mind, these are Q4 numbers, not reflecting NVIDIA's investments

in 2025. Scott. All right. Christina, thanks so much. I'm glad you hit on Nebius Group, too, because our viewers may remember that it was a stock pick right here from Ankur Crawford of Alger on Closing Bell just last week. That stock up only 30% since then. We'll continue to watch it up that 7% today. Speaking of investments, we are whale watching today and getting the latest moves from KOTU management and Tiger Global. Leslie Picker joins us now following that money for us. What are we learning here? Hey, Scott, it feels like you and I have been whale watching all week, actually, but there are some new SEC filings that indicate hedge fund managers have been somewhat mixed on Chinese tech.

KOTU, for example, revealing its 13F filing showing its equity holdings at the end of December. In it, Philippe Lafont's firm slashed stakes in Alibaba, JD.com, and PDD by 93% each. That's hundreds of millions of dollars worth of selling in these names. Tiger Global also just filed a short while ago that firm showing a new stake in PDD worth about a quarter of a million dollars at your end and maintains smaller positions in a few other Chinese tech names. Contrast KOTU and Tiger with what we saw in Appaloosa's filing earlier this week. David Tepper's firm bumping its exposure to several

names in Chinese tech, including a stake in Alibaba worth more than a billion dollars. At the end of Q4, Alibaba also bought more of JD.com, or sorry, Appaloosa bought more of JD.com, Baidu, and PDD. BFA noting in some research today that since January 20th, Chinese big tech Baidu, Alibaba, Tencent, Xiaomi are up 22% versus 0% returns for the Mag 7. The Mag 7, however, is 17 times bigger in combined market cap and has, of course, had a better run over the longer term than the Chinese tech peers. The deadline for 13F filings later this evening.

So we'll keep on monitoring as they come out over the next few hours or so, Scott. All right. You give us a heads up if you see anything interesting that we need to know about. Always. Leslie Picker, thank you. All right. We appreciate that. Let's bring in now Mira Pandit of J.P. Morgan Asset Management and Kevin Gordon of Charles Schwab. It's good to have you both with us. Let's just play off first, Mira, the tech conversation that we've been having, because tech certainly, you know, dropped way back in the categories of the sectors that were doing well. Now it's had a bit of a resurgence this week. Why so?

Well, clearly it's not a time to drop tech or the Mag7. I think what we've seen from earnings overall is that there's some really positive long-term prospects here. And just because you have a little bit of competition from other companies, other markets, and those competitive moats are dwindling somewhat, doesn't mean these companies cannot be fundamentally huge deliverers for shareholders. But I do also think we are all breathing a bit of a sigh of relief here after the last two years where the MAG7 were 63% and 55% of S&P 500 returns, that this year when they're only contributing 3%, the rest of the market is up. We are still near all-time highs and genuinely it has been a rotation rather than a sell-off. And what of the market is up. We are still near all time highs. And genuinely,

it has been a rotation rather than a sell off. And what it reminds us is that biggest is not always best. If you look in 2024, the 10 best performing stocks, only one of them was a mag seven. Three of them were tech. And then the other seven were utilities, energy, industrials. So it's really about finding those best opportunities. And some of them are related to tech, but not directly in that sector. Sounds like your big point is embrace this. Don't get hung up on the fact that tech has had been underperforming for a while. This is exactly what you were waiting for. It's a healthy market when you see that market that investors are more discerning about what tech is and isn't, which players are taking advantage of

longer term trends, which players are really managing their balance sheet in an intelligent way. And that doesn't mean things are in or out. It means we have to be pretty selective underneath the surface, but also embrace the fact that the broadening that we've been waiting for is here. What's your take, Kev? I think the best thing, a lot of great points, the best thing of which I think is this conflating that often happens of them being the best performers, them being the mega caps of the MAG-7, being the best performers

just because they're the largest. Not always the case. I mean, you make the point about the top 10 last year, only one MAG-7 member being in there. Even if you start going down the performance spectrum and you look at the top 200 performers in the S&P, Microsoft didn't even make it into that grouping. It was, I think, 233rd or something, you know, in that zone. It's the only one of the mega caps, by the way. I think that's down over a one-year period. Yeah, and it's fascinating even also year-to-date. I think the bigger picture now, just moving away from just their contribution to returns for the index, is now just the dispersion in that group. The performance for something like a meta, which you were covering with Mark and even a Google, living in the same sector, but could not look more different over

the past month or even a couple of months. You expand that to the other sectors, whether you want to start including something like Tesla, it is this massive now performance gap, double-digit performance gap between the best performer being meta, the worst performer being Tesla. So I think if anything, it's adding to the story or the, I guess, overall narrative of the fact that not only is that group not contributing as much, but even within that group, there's this massive dispersion. It does not look like a monolith in terms of performance. If you have a MAG-7 become a LAG-7, as some have suggested, I didn't come up with that.

I wish I did, but I did not. It's OK, because these other areas, as you said, are doing so much better. And the market's right now sitting at a new closing high. Right. Take a look at some of the other areas of the market that have been doing really well. Let's point to earnings season. When we came into earnings season, it looked like we would see year over year growth of just north of 11 percent. And what it's shaping up to be is year over year growth of just over 16 percent for the quarter. That's not a normal dynamic to see that kind of momentum throughout earnings season. And also, if you look underneath the hood there, about 50 percent of the overall earnings season contribution here in terms of profit growth is from financials. So you take

a sector like financials, which has a lot going for it, not only leading from an earnings growth standpoint, but what you also saw is when you look at the senior loan officer survey, you saw the net share of banks looking at demand for commercial and industrial loans ticking positive for the first time since 2022. All this tariff volatility likely to help trading revenues. And if we do see deregulation, that should help things like M&A, IPOs, lending activity as if it starts to become a little bit cheaper. So there's certainly other places to look at. A week in which we got hot inflation data plus tough tariff talk, not implementation, talk, plus a questionable consumer, I think, with that retail sales number.

And here we are sitting at a new record closing high on the S&P. Are you surprised by that? Well, I work in reverse order. I mean, for retail sales, there's a lot of evidence, not just within the retail sales number, but also within the industrial production number that there was probably a big weather effect. So whether you look at, yes, the decline for retail sales, pretty massive relative to expectations, but also within industrial production, the single largest contributor to the gain that we saw for January was the utilities component. So strike that from the record. Yeah.

Well, I mean, it's notable if it's the start of a trend. And if it is reflective, actually, of a pretty big pull forward in retail sales and goods spending in the fourth quarter, maybe in anticipation of tariffs. But it takes a couple of months for us to figure out whether that's going to be the case. And to your point about the tariff talk, it's really just talk. There's no details. So I think that's why, for the most part over the past four weeks,

to the extent that there has been concern over potential talk of tariffs, a lot of it just has no detail to it. The policy has been thrown out there, but it's really just a headline policy. There is no concrete detail under the surface. So I think that is a big reason as to why the market has been able to largely fade any of the risk associated with it. Does it eventually catch up to itself, Mira? I mean, the idea of tariffs? Or, I mean, you could easily make the argument that, look, you may never get tariffs to the degree that the talk was initially because they, the White House, cannot afford to have an inflation problem. They don't want to own that.

They still have the ability to say, you know, look at those numbers that came out this week. That's Biden's problem, not ours. Soon you break it, you own it. They don't want to get in a position that they're having to defend all of this in the face of rising inflation. All of a sudden you have a Fed talking about potentially hiking rates. You know where I'm going with that. It's not even just the inflation component in terms of whether tariffs actually cause inflation. It's also the inflation expectations component.

You saw the University of Michigan survey jump one-year expectations 4.3% for inflation. And if we see those kinds of numbers, it becomes a bit of a self-fulfilling prophecy, even if the inflation impact from tariffs is somewhat limited. I think the best case scenario for markets is that markets become desensitized to tariff news. And in fact, it can be used in more of an economic realm to negotiate with countries. But the lessons that we learned from 2018 is that tariffs can cause a slowdown in revenue growth when we think about profits. This time around, with margins as high as they are and consumers fed up with inflation, do companies actually have to eat that and those record margins get eaten into? And then you play that out to corporate actions. And what we had

seen during tariffs 1.0 is that you did see a slowdown in CapEx and CapEx intentions. The NFIB survey that just came out showed the biggest drop in 30 years of CapEx intentions, along with a rise in uncertainty. So you start to worry about that company impact over time. The number that probably matters more than anything else, Kev, is 15.3. And you know what that is? That's the earnings growth for the fourth quarter over a year ago. We've made the big issue over the fact that, oh, the multiple on this market is historically rich. You're not going to be able to get multiple expansion much from here. You need earnings to deliver. You happy with that? We're showing you on the screen here, 15.3. Yeah, I think what's

been notable, though, is that even though that blended growth rate, which, by the way, was in single-digit territory not too long ago, so the revisions throughout the quarter have been pretty remarkable. What hasn't accompanied that and what I'm kind of waiting to see more in terms of meat on the bones from companies and their commentary is that the estimates for 2025 have consistently moved down. If you look quarter by quarter, there hasn't been any meaningful pickup. And we're still in that period where, you know, revisions tend to skew to the downside. So until the middle of the year, you don't get as much clarity.

However, you know, to Mira's point about the fact that tariff policy can be a pretty significant headwind on the economy, I actually don't think that it's the tariff amount itself that actually matters as much in the end, because now we're involving so many countries in so many regions around the world. It's the nature of this policymaking. At the time in 2018, 2019, it was policy by tweet. Now it's policy by post. The fact that we don't know on any given day what the announcement's going to be, whether there's going to be a delay, who the tariff is going to be on in terms of the goods coming into the country, that creates this thicker fog of uncertainty from a business standpoint.

So if you're a large company trying to plan for CapEx or hiring and trying to make a long-term decision, it's harder to do that when you have not only tariff policy being so uncertain, but also immigration policy being uncertain too. So that to me and to us is something that weighs on the economy, maybe over the medium to long-term, not something that happens tomorrow. Yeah. I mean, if anything, the market certainly learned, right? From the first experience with all of this, no need to potentially overreact to something that might not actually happen. We shall see. It's good talking to you both. Thanks, Scott. Aaron Kev, it's good to have you here post nine.

We're just getting started here. Up next, SailPoint returning to the public markets this week. So are more IPOs on the way? We will discuss with Manhattan Venture Partners. Santosh Rao, we are live at the New York Stock Exchange. You're watching Closing Bell, CNBC. We're back. First tech IPO of the year happened this week with private equity back SailPoint returning to the public markets. Optimism now building that more offerings will soon be on the way. For more insight, let's welcome in Santos Rao. He's Manhattan Ventures head of research. Good to see you. Welcome. Great to see you. Thanks for having me. You look at SailPoint and you said what? That's a good sign. I mean, we need the narrative to change, to start. We need the IPO talk to pick up. So I think this is a good sign. Yes, it was a PE-backed company. It's not a typical VC-backed

company, but it's fine. IPO is an IPO. It brings out the risk capital out there, and that's good. So we need the risk-on sentiment. There there's a lot of pent up demand out there. And we are seeing shape. We're seeing that we saw that with the earlier IPOs as well. So I think things are picking up slowly. But I think 2025 is setting up well. The macro setup as well. And there is a supply, tremendous supply. And we'll see. I mean, it'll pick up. I think it's going to be more towards the second half as the dust settles here and we see all these cross currents kind of take some shape. And we'll see. I think so. Net net, I would say it's a good setup for IPOs in 2025. I mean, we've talked a lot about business confidence and the uncertainty that, you know,

some policy unknowns out of D.C. are causing. Does that have a direct impact on IPOs, too? Yeah, to the extent that it affects the sentiment. And we want we don't want any upsets. We want people to come in, not worry about any unexpected events out there. So to some extent it does. But I don't think it's a one to one relation there. IPOs are a different breed. Their variables are different. They don't get affected by tariffs, let's say, directly,

and so things like that. So I wouldn't say that much. But in terms of the overall sentiment and the way the broader market views it, I think that's important. It has an effect from that side. We don't want that to derail the economy, not to slow down everything. Things are picking up. The GDP is good. Earnings expectations are good for next year, about 13% year-over-year growth. So earnings are coming out good. Companies are reporting good numbers.

They have downsized. They have automated. Their operating margins have gone up. So all that will flow into, that sentiment will flow into the IPOs coming out. And one more point. The IPOs that have come out, they're doing well. So I think overall, I think the median increase

of the last few IPOs, that sample of IPOs that I looked at, it's up close to 50% in terms of since the IPO price. So there is a lot of sentiment, there is a lot of demand, and you will see that companies, people will get confidence as the companies come out how has the deep seek news impacted your world in terms of venture funding both towards the the size of the businesses and the kind of dollars we're talking about I mean if anything this got people thinking that you can do more with less. So how does that impact your world?

Well, I think it's going to be constructive overall. It's going to be great for developers. You're going to see a lot more applications come to market, very innovative applications at a reasonable cost. So I think that's a big gating factor that was there in terms of the cost factor. I think that's going to help out. So you're going to see number of applications. It's going to be more in the 2026 period where you're going to see AI

applications take off. But definitely, there is some, right now it's too early to tell, but you will see some at the margins, you will see some slowdown, some rethinking as to how much we want to put in. Can we do more with less? I think that fact will take over at some point. But at this point, I think these things are flowing as is. Do you think I'm sorry to interrupt you. I just want to get another one in. In terms of valuation, I'm just wondering, you know, where we are in the arc of valuation. We had a real come down in valuations in the, you know, the last couple of years. Fed starts raising interest rates. It changes the whole game. I'm looking at a headline in front of me now.

It just makes me think of this question that says it's a report. I'm not exactly sure from who, but I think it's on Bloomberg. Robotic startup. I'm going to read you this and then I'm going to get more on this in a minute. Just give me a sec. Robotic startup Figure AI and talks for a thirty nine and a half billion dollar valuation. What does that make you think about the kind of dollars that are chasing the next great AI play? Absolutely. And that's a great company.

It's one one that I really like. And that's what you're seeing. This is putting money in the right place. They are on the right side of the market. There's tremendous growth expected ahead, especially in robotics with all the labor shortages and hazards everywhere, occupational hazards. You go to see robotics, occupational robotics and so many other robotics do very well. So I think all that is good. I mean, that valuation is not surprising. You're going to see the companies grow into that because there is demand for it and the revenues are picking up. So I'm not surprised. That's going to be the trend going forward, especially in AI and AI-enabled companies. Santos, we'll see you soon. Thanks for your insight. Greatly appreciate it. Up next, 314's Warren Pye is back with us. He's outlining three big risks he sees for this market. Tell us how he's positioning when we come back. We're back, S&P, not far from a new closing high on this Friday. Our next guest says an even bigger breakout could be in the cards. Let's bring in Warren Pies, 314 Research co-founder. It's good to see you. It's good to see you. So you think a bigger breakout could

be in the cards, but I see here that you took your weighting to stocks down a bit. Am I reading that right? You are. Yeah. So we were running an excess long position and we just neutralized that last week. And so I think the bottom line is it's too early to outright worry, but you need to start looking ahead to some potential risks in this market. And like you said, the market's been in a really tight range. It's 6% plus or minus for the last three months. Really, if you go back historically since 1950, this tide of a range only occurs about 13% of the time. And you really need to be patient and watch where the market breaks. And our view is we're going to break out to the upside in the very near term, which is positive. But when we get out to spring, I think you need to start taking some precautions when we get out to spring. Why are you overweight bonds?

I just don't see. Number one, I think inflation is going to disinflation is going to bite pretty hard this year. And I think that the gist of our concerns on April are growth concerns. And so I think for the first time in a while, bonds are providing a really nice diversification benefit for your portfolio. You know, I see the consensus that comes on TV and just out in the financial news in general. And they're saying, you know, no cuts this year. The Fed's going to be on hold all year. I don't think the economy can handle that. I think that the housing market at 7 plus percent mortgage rates doesn't really work. And we're going to see that really it's going to be about April, May.

I think those cards are kind of flipped over and we can see that clearly. What role are tariffs going to play in all that? I don't think so. Our view is that the tariffs themselves are a major problem for the economy or the market or for inflation even. But what I see, the major impact that tariffs are going to have is on the Fed. So, you know, if we look at last year and this year, you know, we just had this hot inflation report. I think if you dig through it, it's not that bad. We had a very similar residual seasonality last year, the first three months of the year, hot inflation. The Fed was very quick to calm everybody down and say, we want to look through this. It was an election year. The Fed was much more prone to cutting last year. I think

that the role tariffs plays is it gives the Fed a potential excuse or at least a reason to be less reactive to inflation. So when we go out into April, May, say, why are you so concerned, April, May? We have that March Fed meeting. I think that tariffs and the threat of tariffs at that point in time are really going to cause the Fed to continue on this hawkish pattern. And they're going to be doing that at a time where the economy is slowing. Tax receipts are coming in strong. Whenever you have a strong bull market year in the preceding calendar year and you go forward and it's time to pay the tax man, that's usually a weak period for the stock market. So I think all those things come together around April, right after that Fed meeting. So tariffs, I don't see them as a threat in and of themselves.

I see them causing the Fed to be more hawkish, though. More hawkish. But eventually, though, it sounds like you think they're going to have to act. I mean, if the economy is going to slow more dramatically than maybe some people think. And I mean, you're thinking about Doge also, right? If you're going to cut spending that dramatically, you're thinking about growth taking a hit as a result. So a more hawkish Fed turns into a more cutting Fed, though. Yeah, I mean, like right now, I'd say if you look at the futures market, there's like one cut priced in in Fed SEP is like two cuts priced in for the year. I think we're going to take the over on that. So I think we're going to have three or four

cuts still this year. And it's really just a matter of how painful it's going to be to get there. If the Fed wants to stay really what we're calling a recalcitrant Fed, if the Fed wants to stay combative or recalcitrant, then I think it's going to be a tough time for the markets. But ultimately, one way or another, I do think we're going to get cuts. They might not come till the back half of the year, but I'm taking the over. That's part of why we want to be overweight bonds here. I think the Fed cuts three times, if not four, this year. You want to be overweight or market weight on tech? I mean, there's a pretty good debate, I think, to that question being asked right now. I want to be overweight personally. You know, I look at this, the growth scary.

So part of deciding what to be overweight is looking out and not making mistakes. So I don't want to be I want to have interest rate sensitivity in my portfolio. So maybe utilities, interest rate sensitivity in my portfolio. So maybe utilities, interest rate sensitive stocks like that. And I think large cap tech, they've trailed the market here. We've had a broadening out. But ultimately, if the market's going to break out and really you want to be bullish, then I think those are going to have to be the leaders still. And I think I have a hard time. You look at where earnings are supposed to come from. You see the big role that semis play, NVIDIA plays. Those have to be the leaders. If we're going to have double-digit earnings, which I think we will, it's going to have to come from the tech sector still.

So to me, yeah, I want to be overweight tech. It has some defensive characteristics given the growth concerns. I want to be underweight resource stocks in this environment. So I want to be underweight energy. I want to be underweight miners and things like that outside of gold and stay sort of defensive in my weightings within the market. Interesting. I mean, the materials, for example, I'm just looking at, as you said it, one of the better performers year to date. So that's an interesting dynamic going on. Warren, I'll talk to you soon, man. Thank you. I appreciate you. Thanks for having me. Warren Pies. Yep. More 13Fs coming out. Leslie Picker, obviously, following that for us. What do we see now? Hey, Scott. Yeah, Viking Global filing their 13F, making some interesting moves during the

fourth quarter. We've been poring over that 13F filing, showing a lot of love for banks, bumping stakes in J.P. Morgan and Bank of America by more than 100 percent and 24 percent, respectively. Their each of those holdings is over one billion dollars. Viking also added to its position in Charles Schwab, a similar size there. However, Viking shed a bit of U.S. Bancorp, although it is still a 10 figure position for them as well. Viking nearly tripled its stake in Alphabet to 700700 million as of the end of Q4, but it slashed Amazon by 36% and sold out of a billion-dollar-plus stake in Apple. Viking also bumped up its exposure to Comcast, a parent company of NBC and CNBC. That was bumped up by sixfold to hold roughly $750

million as of year end. Just a reminder, all of these 13F filings are a snapshot of long equity holdings. As of December 31st, the positions may have shifted in the six weeks since then, Scott. All right, Leslie, thank you for that. Leslie Picker with the update. Up next, we track the biggest movers into this Friday close. Christina Parton-Noblos is standing by with that. Tell us what you see. Well, TechTitan signs a billion-dollar server deal to power the future of AI,

plus a major web hosting company stock tumbles as AI investments fail to deliver results. And the Super Bowl betting frenzy breaks records, sending gambling stocks soaring. These stories and much more when we return. We're 15 from the bell. Back to Christina now for the stock she's watching. Dell Technologies finalizing a landmark deal worth over $5 billion to supply AI servers to Elon Musk XAI. This according to reports the servers will be equipped with NVIDIA chips and delivered this

year with the goal to support XAI's chatbot. Shares jumping right now over 3% on the news. GoDaddy results sinking the stock as the online web hosting platform reports a massive 82% drop in net income. GoDaddy previously announcing AI rollouts to draw more customers, but the firm is still forecasting revenue and profits far below expectations. And DraftKings winning big as the online gambling platform hits yearly highs despite disappointing earnings. DraftKings seeing a new daily record of $436 million in bets placed after the big game and lifting the lower end of its revenue forecast. Seeing shares of other big gambling stocks rising. DraftKings rival sending Flutter and record slot plays

and promising China revenue sending stocks like Wynn also higher. So there you go. You can see Wynn up about 10 percent on that news. All right, Christina, thanks so much. That's Christina Partsinella. Still ahead, shares of HIMS and HERS up 40 percent this week alone. So is this a breakout or a short squeeze? A little bit of both. That's ahead. Markets up. We're back. Twilio shares, they are getting hit hard today after weak earnings and guidance last night. The CEO will join OT to break down the quarter, and that is coming up in just a little

bit. Up next, right here in the market zone, some major deal talk in the energy space today. We'll tell you which companies might be in play next. We're in the closing bell market zone. CNBC senior markets commentator Mike Santoli, here to break down these crucial moments of the trading day. Plus, Pippa Stevens on some deal-making, perhaps, in the energy space. And hims and hers, tracking for its best week since 2021. Brendan Gomez has those details. Mike, I'll turn to you as we close out the week.

We'll see if we can get this closing high on the S&P. Wrap it all up for us. Kind of gently hovering near these highs. In fact, it's about a 30 percent below average volume today trading. It seems like it's the market this week was like this overstimulated toddler, right? Too much news, too much noise, too much new data to assimilate. And we kind of figured it all out. Net net, not that big a change in inflation expectations, the growth profile, treasury yields.

And so we can hold these levels. I mean, we've got the NASDAQ composite back up of 20,000. If you remember, the peak there is back in mid-December. So I think it's a net positive we're holding these levels. It's a very low-momentum market, though. There's a lot of momentum within the market as a whole. It's not doing a heck of a lot. We've got a little bit more challenging seasonal effects and maybe some flows flows wane going into next week, but from a position of strength. I mean, we're a half a point from

just about from a new closing. Yeah, it's kind of amazing. Every Friday of the last four, I believe we have taken a trip above 6100. We're back there. Yeah, markets bouncing a little bit around. Pippa Stevens, talk to us about these potential energy deals. Yeah, Scott. Well, dealmaking in the oil patch is far from over with reports of two deals, starting with Diamondback reportedly eyeing private equity-backed Double Eagle, that's according to the Wall Street Journal, as the company looks to consolidate its position in the Midland portion of the Permian Basin. It follows Diamondback's buy of Endeavor Energy Resources last year.

And Blackstone is reportedly weighing a sale of natural gas explorer Olympus Energy. That's according to Bloomberg. It could value the company focused in the Appalachia region at as much as $2 billion. Now, this comes after upstream U.S. M&A climbed to $105 billion last year, according to Enveris, as companies rushed to secure prime acreage. Now, today's activity could also be an indication that the new administration could be friendlier for oil and gas M&A. Finally, heading into the weekend, keep an eye on that gas. It's up 13% on the week as an Arctic blast is set to hit much of the East Coast next week.

Scott? All right, Pippa, thank you very much. Pippa Stevens, hims and hers. Best week since 2021, looks like. Brandon Gomez here with those details for us. Yeah, up again today, adding to gains that we saw yesterday. Down from session highs, though, you can see there in shares. That's adding to double-digit gains yesterday, now up over 50% this week alone and 150% year-to-date.

So where's the warning? Well, Wall Street Journal credited the run-up yesterday to the telemedicine company's buzzy Super Bowl ad that took aim at Big Pharma, calling the health care system broken. That and RFK Jr.'s confirmation yesterday seen as a tailwind for the drug compounders like HIMSS in competition with Novo Nordisk's branded Wagovio Zempic weight loss drugs. But a caution to investors not to be fooled. This is a heavily shorted stock. If you look at trading volumes yesterday, shares traded over double its 30-day moving average. Similar story today. You see triple there, Scott, with no apparent catalyst for news from the company.

So air on the side of caution with this one, Mike. We've talked about it on the desk before. No, without a doubt. And it's in this sort of mini category of stocks that have this sort of societal resonance with, like, the buzzy thing people are doing right now. You see it in crypto. You see it in the sports betting stocks. And you see it in hymns. There's sort of this overlap just You see it in crypto. You see it in the sports betting stocks. And you see it in hymns. There's sort of this overlap just sort of culturally in it. And I think it's just

sort of the same type of just interest in this type of, you know, sort of maverick transactional separation of hype and fundamentals. Right. Well, that's that's the trick. All right. Good stuff, Brandon. Thanks so much for that. That's Brandon Gomez here. All right, Mike, I turn back to you. All right. Meta is going to get 20. It is because it's up 1.2 percent. NVIDIA has been on a nice little move as well. And those earnings are coming up, too. And those are sort of going to start to overhang over the tech space, which has had a bit of a resurgence. It has had a resurgence. It's again been it's been pick and choose. I mean, NVIDIA and Apple were responsible together for about half of the S&P

500 upside on a week-to-day basis. So it shows you they can still do some heavy lifting, even as it's not kind of comprehensive across the board. We were at 6,100 or within a hair of it. I keep mentioning this December 6th, right? So you go back over two months. The market is at the same level, but a little bit less expensive because the chains have moved forward on forward earnings estimates. And therefore, this is the way it's supposed to work. I think in the absence of having to kind of absorb all of the tariffs on off story or exactly what's going on in terms of the sort of rapid spending cuts by the government, we'd be saying earnings up double digits for the year. Yields are pretty

steady in an acceptable zone. Yeah, we got high expectations coming into this year. Maybe sentiment got a little frothy in December, but we've sort of worked some of that off. So in other words, firm footing. But I don't think people are willing to get that comfortable or that far overexposed to the market on a tactical basis because of what might come. Yeah, I mean, there's rich environment. There's, of course, I was just going to say there still is D.C. headline risk and a lot of it. And we've learned our lesson on how this market can react.

Fairly but richly priced market. You already are expecting good things. And so it feels like the market has some stuff to lose if you kind of have a little bit of friction on any one of those fronts. But, you know, as I say, going into it with current conditions from a position of strength, and I think that's something we've been feeding off of for the first six weeks of this year. We're up 4% in the S&P. All right, good stuff. Mike, thanks. Enjoy the long weekend. All of you as well.

So we'll settle out here. We may not get this new closing high on the S&P, but either way, we're not going to be far from it at all. Looks like a few points as we speak. But we shall see, and I'll see you on the other side of the long weekend.