Closing Bell - Closing Bell: The AI Runway 5/7/26

Episode Date: May 7, 2026

How should investors play the AI runway? We discuss with Requisite Capital’s Bryn Talkington, Bank of America’s Chris Hyzy and JPMorgan’s Stephanie Aliaga. Plus, Anthropic revealed some eye-popping new growth numbers. We discuss and debate with venture capitalist and Anthropic investor Lo Toney. And, star analyst Mike Mayo joins us fresh off Citigroup’s investor day. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

All right, Kel, thanks so much. Welcome to closing bell. I'm Scott Wapner, live from Post 9 here at the New York Stock Exchange. This maker and break hour begins with, of course, the AI trade. And whether this is still early days in the market's magnificent move or a later stage blowoff that investors should in fact worry about. We'll ask our experts that question as we enter the final stretch. There is the scorecard with 60 to go.

In regulation today, did have some midday weakness. We do wait for some more news on the Iran War, some rough consumer news today, probably a drag in its own right. You had the big decline for Shake Shack. And then, of course, cautious commentary from McDonald's today, all ahead of the jobs report tomorrow, which is going to be, of course, front and center as well. In tech news, Apple shares hitting a new high today,

along with Alphabet. That's been a near daily occurrence, it seems, for at least Alphabet. But Apple roaring all the way back, too. We'll have a report coming up on Software Snapback today, led by a couple of big names on the move big time. at Datadog. Crowd strikes up. Z-scaler 2. Again, more coming up there. It does take us to our talk of the tape, the AI runway. And now billionaire Paul Tudor Jones, what he told at CNBC today about how much room is left in this incredible run. Listen. I kind of think Claude,

January of this year, would be the equivalent of when Microsoft came out in 81. And then 95, we kind of look at when we finally allowed the internet to be used for commercial purposes. I think that was May of 95 and then Windows 95 came in a few months later. Those were both the beginning of productivity miracles that lasted four to five and a half years. We're kind of, I'd say, 50 or 60 percent, if I had to pick a period, we've got another year to run. Okay, so does our panel agree with PTJ? Let's welcome in, CNBC contributor, Requisite Capitals, Bryn Talkington,

Maryland Bank of America's Chris Heise and JPMorgan, Stephanie Aliaga. It's good to have everybody here. Bryn, I'll give you the first shot at that. What he had to say? Year or two left. Well, that would track because if you look at when Netscape came out back in 1994 and then you overlay chat GBT of 2022. It puts you today in like the spring of 1998.

So, I mean, I think that tracks with what he's saying. I think that to me where I struggle, I think through this, is that we are early days in the technology of AI. That is clear. But what has been pulled forward? Because we are not early days necessarily of individual names. That's a really good point, right? So that to me is where I anchor on not conflating the two

because I feel like many do conflate the two. The two periods? Well, you conflate the thing that technology is early days, and then you have to separate. The stocks are not in early days because they are pricing those two. They're mutually exclusive. They price things in first. Absolutely.

Okay, that's a good point. What about you, Mr. Heise? What do you think about with Paul Tudor Jones and I had to say and how you're thinking about it in your own mind? Because I think it's on the minds of every investor out there. It's like these moves have been incredible. Where are we in this cycle? Middays, early days, late days,

later days? What do you think? What do you say? I like the way that Bryn talked about it. And I'm going to also say the same thing to a certain degree, but I think it's still very early days. Price momentum has gotten ahead of some things. We don't even know what wave two or wave three is. Have we gotten to physical AI yet? No. We haven't gotten to the mobility factor of AI. Think about the autonomous truck. They're using AI right now, the trucking company, for logistics reasons, but not for uptime or downtime yet and how to manage all that. So I think the way to think about is in waves. First wave, yeah, 50 to 60 percent through it. Far be it for me to argue with Paul, one of the best investors out there. However, we also can't say only 16 or 18 percent of the S&P has actually utilized

AI and say it's late days. So we're seeing productivity gains happen before our eyes right now. I think the magnitude of that in this supply-led cycle is still very early. This move that we've seen in the market from the lows all make sense to you? I think we've been surprised at just how fast the overall pie of AI has grown. Markets where this AI fatigue that's been lingering, it's like the zero-sum trade between the hypers and semis. And we're learning that's no longer the case. When demand for these agentic coding tools is skyrocketing, and as we use AI more and more, we're using it from more things.

compute is exploding. So my biggest takeaway from this year is that we're going to be operating in a supply-constrained environment around AI services for at least the next five years. That has investment implications, and it points to if you can sell a critical input into this AI race, you're going to be very well positioned for some time. So that's why I think we're still early. So investors are placing some pretty big bets in a pretty concentrated area. We can probably agree on that. I thought the FT today set this conversation up pretty well in which they say Wall Street's rebound since late March has been driven by the smallest number of stocks on record. Because of that, they talk about the, quote, fragility of this rally. And then they point out that just five tech stocks, Google, Broadcom, Amazon, Nvidia, and Apple have accounted for more than half of the S&Ps gains recently.

So five stocks accounting for half of this incredible move that we've seen in the market. Well, it's like, Nvidia is actually only, let's say, 14% year to date. It's the size of these companies. The movement is just overwhelming. But actually, those names are not the best performing. The best performing names are the sand discs, the microns, the Western Digital. Oh, that's supposed to make you feel better when you look at those charts. Is that parabolic moves? Yeah. But when I think of this market. But the market cap size is what sort of they're talking about, right? That's why we're looking at those through the prism of the S&P. Correct. But if you think about it, if Anthropic is now, worth $1.2 trillion and everyone talks about their revenues and the revenues of Open AI. They are just hemorrhaging cash, by the way. Forget free cash flow. They're so free cash flow negative. And so why can those private companies that aren't even close to making any type of earnings allowed to be $1.2 trillion or $1 trillion, yet Google, Apple, Amazon that still are just printing money are getting penalized. And so I think that's appropriate that these big names have really solid returns because they still have fortress balance sheets. So I think that those returns are very warranted.

Concentration begets fragility. It doesn't really mean anything, though, so we could stay reasonably concentrated and it will always feel a little more fragile because if anything happens to the stocks, then obviously it's going to have an outsized move within the S&P, which we just said has had this incredible move off the low. It's a smile from one side of the mouth to the other type. of argument. It's math. This is why it happens. However, look what happened during March. When we hit the lows of the 30th and the big companies came down, tech wiped away its entire premium. But the market was only down a few percent, five or six per cent. We didn't even, nine percent. We didn't even hit correction territory. So the rest of the market actually helped.

I think that is a very, very healthy market. This entire, you know, we call the acronym Clamps, compute light and liquid architecture, memory, power, and stack. It's obtrusive. It goes through all these other companies, and that's why you're seeing margins widen out. So I think it's just a story we have to tell about it. There are some who are saying that this incredible move from the March Lowe's has all but ushered out whatever that great broadening story was that we were talking about

and trying to build upon. Now, that's over. And it's just going to be all AI all the time for the foreseeable future because these trades have been deemed rather easy relative to trying to pick stocks in other area. I'm not talking about other sectors and individual names that can be positively impacted by AI because everything in this market probably can. But the places where people are going are no longer the real broadening trade that we've seen before, are they? Look, I think this is a market with an AI rocket ship attached to the back of it.

And there's been some fog, especially on the geopolitical front. But the reality is AI, like the fundamentals around this. in this investment wave are still so strong. And I think the good news that I've been getting around the broadening out is that the AI trade itself is broadening out. You have Korea, Taiwan, other companies that are selling metals in Latin America have been performing well in this wave. And then even in our domestic chip ecosystem, you've had legacy CPU companies entering the fray in with really astounding earnings results. So a lot of investors are like, how do I hedge against AI? And I think if you're trying to find no AI exposure, you're going to be like,

looking at a very shrinking basket of stocks. The reality is you want to diversify different points of the value chain because there are different economics of how all these companies win and different properties in which they operate in portfolios. So at the very top of the program, we mentioned this much needed. I think you can call it that software snapback as that group looks to extend its winning streak, at least on a weekly basis. You're going for four weeks in a row here. A couple of huge moves today are helping that story along as well. Seym Modi joins us now with more there. Hi there. Hey Scott, Datadog results. That's providing much-needed relief for software today with quarterly revenue topping a billion dollars for the first time ever. Data Dog essentially provides the rails for OpenAI and Anthropics AI models to run on, providing key checks and updates.

CEO Olivia Pamel revealing it also landed two large hyperscaler wins in the seven to eight figure dollar range for training models. Now, the company's strong report lifting other software infrastructure names like Snowflake and MongoDB. In addition to that impressive report for Fortinet, that company revealing that customers are upgrading to higher performance systems, a sign that customers are willing to pay up for cybersecurity, Scott. So the big takeaway here is software certainly isn't dead, and the street is rewarding companies that are, one, developing AI-native solutions and articulating a clear path to monetization. All right, Seema, thank you very much for that. That's Sima Modi. I think there are people who are trying to say that the so-called death of software has been greatly exaggerated to say the least. Now, what about this move?

Because you're in the cyber names and the ETF that tracks them, but what about more broadly? Is this legit, this bounce back? It is. I mean, I just added to Microsoft just last week after their earnings. And so if you look at IGV, it actually technically broke above the 50. I think it broke above the 100 yesterday. Next stop for the IGV should be $100, which is the 200 day, right? So that's getting back above that.

Okay, there's your chart right there, which is telling your story. There you go. So $100 can be the next stop there. And so I think that Datadog tells you that these software companies are not dying, but it was somewhat of a Proof-Me story. They had to have great numbers. Well, it's going to still be that. Let's be clear, right?

These are some idiosyncratic things, too, rather than broad brushstrokes over a sector to say everything's back, isn't it? But if you see, though, Fortinet up, what, 20, Data Dog, up 30, I think you are going to continue to see these type of violent moves on the upside, which we talked about this yesterday, I think the risk, especially in software with individual names, the risk is on the upside. Because a 20% move is telling you that the shorts covered, they were very wrong, and now they're going to reposition and go long. And so I think you're going to continue to see these great companies, you know, surprise on the upside and have these, I think, really outsized move for the numbers

that were printed. Software stocks were looking at their chip counterparts and saying, hey, we want some parabolic moves too. Right. We got them today. Brin's nailed it. It's a great observation. Everything has approved me, right? This is a fundamental. If you don't bring the fundamentals, you're getting pushed off to the side. Does it really approve,

approve me story in this market? I feel like it's where we've placed a lot of votes. Yeah. Behind a lot of candidates who have yet to, in some cases, prove that what they've outlaid in terms of spending is going to lead to what we all believe it will. Anticipation is huge right now. And then it's proved me.

And if you don't bring it in a set period of time, you're getting pushed aside, and there's another group that takes over. Software got exaggerated to the downside. I look at it this way. If you are able to trick code, and the thought is that you're going to disrupt the cybersecurity side of things, shouldn't the cybersecurity side of the equation get better

and be in more demand so they can thwart the tricking of the code? and I think that's what you're starting to see. Have we thrown out too many software companies? Because you were talking about as we identify the world, we can't say that all of the software companies that got thrown in the garbage over the last six to 12 months are going to be obsolete or out of business. No, but there is a real need for them to reinvent themselves.

I think we are in a heightened era of creative destruction. I think that should be good for the market. It should leave more productive AI-ready firms in its wake. But I want to get back to the earlier point I made about the pie overall is growing. There was a study out from the Atlanta Fed just recently. They surveyed 1,400 CFOs. They expect to increase the AI spend per employee by 50% this year. There is going to be accelerating complementary investments made around how do you adopt AI in an enterprise.

And software is going to be a big beneficiary of it. But not every software company out there. the right software companies that can actually reinvent themselves and service agentic AI. I think the market's trying to figure out exactly who is going to win or at least be in the basket of winners rather than the pie of losers. Speaking of the Fed, I'm glad you brought that up because among the other things that Paul Tudor Jones told Squabox this morning, forget about those rate cuts, Mr. Warsh. Listen.

No chance, but do I think he would raise rates before the election, even? though, good Lord, we got a 6% budget deficit. All right, our senior economics correspondent, Steve Leesman, joins the conversation here at the table. What did you make of what he said? Well, I wish you'd gone on to the next piece there, Scott, which is where he talks about all the investment and the demand. Well, the 6% budget deficit is half of it, about 1.2 trillion or so, or 1 trillion being

borrowed by the federal government. The other piece is what you've been talking about for the last 14 minutes and 53 seconds, which is the investment in AI. Scott, that puts upward pressure on rates. There's actually inflation from what they're talking about. I have a charter that looks at the inflation for equipment in the GDP account, Scott. And you can see it was negative for a while. Of course, it popped up during the pandemic and then it came back down. But guess what's happening now to this chart now? It's starting to go up. There you go on the left, on the left side of your screen there, or the right side of your screen, I suppose. That is the

increase in prices. for equipment and a big part of that, Scott, is information process equipment. So in the current environment, it's going to be very difficult, I think, for the Fed share to increase rates because of those two components of the demand for capital from the federal government side and from the private sector side. I feel like the greatest question that's going to have to be answered, and I don't think you can answer it yet. And maybe it's going to take an awfully long time, Steve, to be able to give a credible answer is even in an environment where you have a pickup and inflation because of, in some respects, AI, the counter of the pickup and productivity is going to be so

profound that you reach a comfortable equilibrium of sorts, which is why some worry that the Fed could make a mistake. Now, maybe a Warsh-led Fed is, he's not going to entertain the idea of raising rates anytime soon. But I feel like that's hanging out there on some minds. Does the Fed have an appropriate handle on what AI means on both sides for a pickup in inflation and then a massive pickup in productivity like they talk about. People don't know that I don't know the questions you're going to ask, but because of the mind meld that goes on, Scott, I brought a chart for that just as well. And what you'll see here is a productivity chart. And this productivity chart is quarterly productivity. And what you see when you look at this is you had a pretty good 24, that's probably

a productivity that's coming out of the pandemic where we learned to do more with less. We had work from home, those sort of things, some other things, good things going on. And then we had a couple good quarters, but then look at the last two. When I look at this, Scott, I see a cautionary tale for a Fed chair that wants to make policy based on future productivity gains. The fact is, you don't know if they're coming, you don't know when they're coming. It's a tough thing. And what you have is you have a divided, not really a divided board.

You have a few people on the board. Warsh is going to be one of them. Perhaps Stephen Myron is another one who want to front run the productivity gains. I would say a lot of the rest of the board, I'm going to talk to Goolsby about this tomorrow at 11 o'clock. They're a little more cautious. They're like, yeah, we'll bring them in, but show me in the data before I do that. Worsha said specifically that if you wait for that, you're too late. Other folks would rather be late with that than front-running productivity gains that may not come.

Yeah, it makes for a great continued debate, which I know we'll have with you. Steve, thank you. Probably see you tomorrow off the interview that you just teed up for us as well. So that's Steve Leesman. I mean, how are you thinking about this and what the Fed's job is going to be? It's complicated by all this, isn't it? Well, then on top of that, Jay Powell's not leaving as the stands right now. He's going to go at his term. So Kevin Warsh has Jay Powell sitting there. We feel like you're going to have inflation, just like all the ingredients. inflation's going to be higher. I just, we'll see. How is he going to credibly be able to cut rates?

And what impact I think will Jay Powell actually have staying on the Fed? Yeah, I think you have supply-led inflation right now for obvious reasons. There will be talk about shortages and shocks during the summer months. The consumer will, there'll be a headline about the consumer struggling. And in many respects, there's a lot of points in that. Part of it, right? I mean, it depends who you listen to. Yeah.

McDonald's would suggest that. the consumers, you know, potentially getting worse, at least at the end of the spectrum that they more cater to. You listen to, like, host hotels today, for example, and then you're like, well, the upper end of the K is alive and well. Well, that's the thing. In aggregate, the consumer is resilient. The lower end of the K doesn't have the assets, doesn't have the home equity, doesn't have a low locked in mortgage rate. So they're going what they normally do is they're getting very selective. But in terms of the inflation and what the Fed does, very complex, it used, usually is not a good time to raise rates, at least in history, when oil prices have gone way up.

We've seen what has happened at that point. So we can only go on what the hearing was and what we heard coming out of the hearing, which is looking through and looking through and waiting for productivity. Got the last word. Well, I think Warsh is inheriting an economy that is saying inflation move higher, not lower. And one where if AI is going to boost growth, boost productivity, it's unlikely going to lead to a surgeon layoffs. So we think that the labor market, should be relatively stable this year. So you don't have an economy screaming out for rate cuts, and you have inflation moving higher, not lower.

And I'd say the Fed, actually, in their last SEP, they moved the neutral rate, the long run neutral rate, higher, not lower. And we think that's really a count for long-run productivity gain. All right, we'll leave it there. The conversation to be continued. Thanks, everybody. It's good to have you all here at Post 9.

We're just getting started. Up next, eye-popping new numbers from Anthropic on just how fast that company is growing. We discuss and debate with the venture capitalist and Anthropic investor, Lottoni. We're live at the New York Stock Exchange. You're watching Closing Bell on CNBC. Welcome back. We learned this week, Anthropic continues its torrid growth pace.

Surprising even the company's own leaders. Our Kate Rooney joins us now with more. Tell us more, Kate. So, Scott, we heard that for the first time yesterday. Just how fast Anthropic is actually growing. Here's how CEO Dario Amadee put it at their Claude Developer Day in San Francisco. In the first quarter of this year, we saw, if you were to annualize it, 80x growth per year. That is the reason we have had difficulties with compute, right?

We've planned for anything from it only grows a little to it grows 10x, and yet we saw 80x. Scott, you heard an 80x growth. He says that is the reason that they have been scrambling for compute deals. The CEO highlighted a new partnership with SpaceX, also known now as SpaceX. AI Anthropic plans to use the capacity at their data centers in Memphis. It does fit into a larger deal spree that we're seen from Anthropic. They also teamed up with Amazon. Remember the Google deal a couple weeks ago, that would be a combined 10 gigawatts of capacity.

Those did also come with $25 billion and $40 billion investments, respectively. Amadei also said we are going to acquire as much compute as we can, which could vote well for those hyperscalers. There's clearly demand at least from one big customer, Scott. Yeah, no question. A really important story. Kate, thank you. That's Kate Rooney. Now let's welcome in Anthropic Investor. He's the Star Venture Capitalist Lotony of Plexo Capital. It's good to have you back. As always, 80, 80 times. I mean, 80x? That's insane. Unbelievable. We keep asking when the law of large numbers is going to, is going to kick in. But Scott, I think what's important here is that,

you know, this is not normal infrastructure expansion that Kate touched on. Anthropics starting to behave like a company that's just trying to remove a growth bottleneck as quickly as possible. So, you know, these deals, I mean, this is a key insight that the demand is scaling way faster than expected because we're moving from chatbots to agents. You know, a chatbot is response, but as agentic begins to really take hold, you know, these agents are constantly iterating, retrieving, requiring memory, orchestrating workflow. And so I think what would speak, Xanthropics behavior is kind of telling us what's happening. You know, right after they get more compute, what did they do?

Well, they doubled quad code rate limits and, you know, they removed a lot of the peak, you know, throttles that they had put in place and increased the API throughput. So, you know, they're not rationing compute. They're stimulating demand. and this is kind of the classic Jevins paradox that I've been writing about extensively over the past a year and a half or so. You know, when you see that drop in price,

then what ends up happening is there's not a similar increase in youthhood. There's a massive increase in euthage. That's Jevins' paradox. Is the 80x coming at the expense of somebody else or is this just an anthropic story? Are they stealing from, open AI or somebody else to get to the ADX? Or is this just an indication of just the juggernaut that this

company is becoming fast? I believe this is just an indication of the juggernaut that is becoming very quickly. And being able to have access instantly to the compute with the SpaceX deal, I mean, that's going to really accelerate this growth, coupled with the pulling back the throttles that they had to put in place because of the insatiable demand. I believe what we're watching is anthropic about to achieve escape velocity. The constraint is not the demand. The constraint is actually the compute. And I think that a lot of people are probably looking at is trying to equate

like how this computer is ramping up and then thinking about the revenue that's associated with it because we're seeing things that we've never seen before. We've never seen companies scale this fast. when the CEO of what was already one of the fastest growing companies says that it even exceeded their wildest dreams by 8x, I mean, that's unbelievable. I know. So we'd show like the 2,200% increase in the valuation of this company in the private market, which obviously is great for somebody like you, an early investor in Anthropic.

But I'm thinking about everybody else, okay? because I want you to hear what Brad Gersner told me the other day about that very issue. Company's been growing like a weed. It's been great to him, you, and all those who have been in early. But I'm thinking about what happens when they go public officially. But listen to what he said, and we can react on the other side. They've already IPOed. They were just private IPOs.

OpenAI raised $110 or $120 billion in the most recent round. Look at the cap. table of the investors in that round. It looks, you know, first, it's bigger than any IPO we've had at $120 billion. And then, you know, the list of investors in that round from, you know, the Fidelity's in the capital groups to the altimeters and the CO2s, it looks like a day one IPO cap table. So, so I think you've got to understand that. So what's left for everybody else that wants a piece of this action, though?

Well, that's very good for Brad to provide that type of perspective. sometimes I get concerned about the exuberance that happened within the retail market around some of these names and the anticipation of the IPO. And I think Brad laid it out very well. If you look historically at companies like Google and even Amazon when they went public, a significant portion of the upside was captured by retail investors. Obviously, the venture investors did well also, but a significant portion was available to be captured by early. investors who invested at or around the IPO, even Facebook. Facebook had a little bit of a dip, but ultimately went on a great run of meta, I should say. And I think it is important to be a little prudent in thinking about what the upside philanthropic looks like. We believe that it ultimately is

going to be a multi-trillion dollar company with hundreds of billions in revenue. But I don't think that investors on the retail side after the IPO should just think that this thing is going to shoot up like a rocket. The growth will be methodical and there will be opportunities to be able to make significant gains. But Brad is right. The way that the markets work these days for the private to public, a lot of the values capture on the private side, and it's partially because of the capital that's required and the patience that a lot of these companies now have to be able to get their models correct before they enter the public markets looking at some of the mistakes that have been made in the past. I appreciate your perspective as always. Loeb thanks. We'll see you soon. Loe Tony.

Thanks for having me. Still ahead. Top bank analyst Mike Mayo. He's fresh off City's Investor Day. He joins us with his big takeaways next. Welcome back to the Bell. City Group, the only of the major banks in the green today, fresh off of its investor day. Star analyst Mike Mayo of Wells Fargo Securities, so enthused about it, he couldn't wait to join us. to give you the download. Welcome. Right? You like wanted to run over here and come up here and tell us what about this day today. Well, a city group held its first Investor Day in four years here in downtown Manhattan. So it's great to be one with you. But this was probably the best Investor Day City Group has ever thrown. Wow. I would say it's thumbed up by ABC. A is accelerating earnings growth.

They set new targets for returns that are almost double what they achieved last year. Okay. The B stands for buybacks, $30 billion new authorization. That's 14% of their market gap. And the C stands for culture. These are the soft factors. Scott, you know, I was very critical of Citigroup for decades. Oh, yeah, you were.

And their old culture would be characterized as reckless, arrogant, and complacent. and I think the new culture is one of driven and accountability and transparency and frankly enthusiasm. There was a lot of energy in that room today where you had the CEO Jane Frazier and her five direct reports, five line of business CEOs present and the CFO. Those are the people who are in charge. No one else is in charge at the top. So this is the most clarity city has shown as a. a management team, you know, since I can remember. Okay. How much does Jane, how much credit should Jane Frazier get for all of these things that you're saying and this transformation

that you feel like they have embarked on? Well, the biggest, simple, and most powerful change is going from 50 years of a global matrix structure, a mismatch, a spider web management structure with dual accountability and dual reporting, it was a mess to this simple structure of five line of business CEOs reporting to Jane. Jane Fraser gets big credit for that. Having said that, City has executed for the last year and a half, amazing that they've shown some of the best top line revenue growth amid their restructuring, but they're only part the way there. This is a worst in-class bank that's going back to more average. They're becoming a more normal company. So Jane Frazier doesn't get a Nobel Prize, you know, for rearranging the management structure this way. But they have

executed and if they can execute on the existing plans, there's still a lot of upside for Citigroup stock. It's still my number one pick. Wow. And by the way, she's going to be on with Leslie Picker tomorrow. So everybody needs to hear from Ms. Frazier herself. Some analysts, whereas, you know, you are glowing, obviously about what they had to say, they look at the targets that they put out and they either call them conservative or, as you told us, underwhelming. What's up with that? Why is one underwhelmed, whereas you're just straight up exuberant? I mean, it's kind of like, you remember Rocky Balboa, the movie Rocky? I mean, he got bloody, but he finished the fight and you were happy at the end. Citigroup had an 8% return last year, and they're targeting 14 to 15% return. This is the Rocky of

banks. I mean, it was that much of an underdog, relative to the Apollo Creed of Goldman and JPM? Absolutely. I mean, Citigroup has been down and out for a couple decades, and now they're coming back and they're back in the fight. That by itself is success. But we're talking about getting returns back to more of the average bank, but you can make a lot of money from going from worse and class to average,

and certainly some areas of Citigroup are best in class. They move $6 trillion of money around every day in 180 countries, dealing with over 5,000 multinational companies. Maybe JP Morgan can do it as well as city, not the same breath, but there's no one else close to that. And that's a business that links to about 70% of Citigroup. That's a business, not just for a year or a decade, for maybe decades, because the modes around that business are tremendous and underappreciated.

So, yeah, you might be, you can tell you're under one with the targets. But by the way, city's not assuming much deregulation. So city is having generational restructuring at a time of generational deregulation, and city's not assuming much deregulation as part of their targets. So that's icing on the cake. Okay, we'll leave it there. It's good to talk to you. I appreciate you coming over and sharing those views.

Mike Mayo of Wells Fargo Securities again, Jane Frazier tomorrow. Leslie Picker, don't miss it. Up next, we track the biggest movers into this close today. Pippa Stevens is standing by with that. Hi there. Hey, Scott. Two consumer stops are tracking for their worst days ever, Macro fears hit wallets, the names that are dropping coming up next.

All right, well, Less than 10 from the Bell. Back to Pippa now for the stocks that she's watching. Tell us, please. Hey, Scott. Well, Shake Shack is plummeting after reporting a surprise operating loss in the first quarter as costs way on the burger chain. The company's CEO said on the earnings call that the chain cannot afford to lose guests right now as Shake Shack tries to increase traffic to its stores.

Higher beef costs and inclement weather didn't help matters. Stock is on pace for its worst day ever down 28. percent. Pet care companies, Zouettes, didn't fare much better. They say that pet owners demonstrated increased price sensitivity in the first quarter and slashed full-year profit guidance. That stock is also on pace for its worst day ever. And the story continues in appliances where Whirlpool shares are shedding about 13 percent today after the company slashed its full-year outlook due to the Iran war. Wherpool said in its release that the war resulted in recession-level industry decline in the U.S. confidence collapse, those shares down 13%. Scott? All right, Pippa, thank you. Pippa Stevens,

coming up next. Your OT set up, a rundown of what matters most from Coinbase Block and CoreWeave. They are all reporting the market zones next. We're now in the closing bell market zone. Mike Santoli and Gabli Fund is Kevin Dreyer. They're here to break down these crucial final moments of the trading day. And on the earnings front, Oliver Renick, standing by live from Cebo Global Markets in Chicago with a look at Coinbase. McKenzie Segalos is covering block. Christina Parts of Nevelos is looking ahead. DeKorra we, Michael, I'll get your thoughts today.

We finally took a little bit of a breather. Yeah, really just that. I mean, the market did a decent job absorbing a two and a half, three percent in the semiconductor index, and that's even with Nvidia, obviously, pushing to the upside, trying to escape further damage with rotation. There's still plenty of air underneath, you know, the NASDAQ 100 and the semis. And I do think you have to take note. the fact that yesterday's kind of happy convergence of oil down, yields down, consumer cyclicals

up lasted only one day. So you do have some give back there. And we'll see if it becomes a little more of a macro market as we work away through earnings and we get that job's data tomorrow. Yeah, I mean, you've got some important earnings coming up, speaking of, and over time with Mel. I mean, I know you'll be heavily focused on core weave. Coreweaves, for sure. You know, we've got some consumer plays again with Airbus. B&B Lyft. We're going to have Draft Kings as well as the CEO there in Expedia. So, yeah, I do think it's still a good pulse check,

even though they're not the huge index heavyweights. And as you've been describing, just absolutely massive springload of moves in reaction to some of these results that have been going on all earnings season. All right, good stuff. We'll see at top of the hour. Look forward to that.

Oliver, Coinbase is recording. What options action are you seeing? They look a little bit nervous, Scott, going into tonight's report. Calls do outnumber puts in coin options, but 13,000 of those calls were sold today compared to just under 10,000 that were bought. And generally, traders expect a smaller earnings reaction than normal. Price again, just a 7% swing despite 2 16% plus moves the past year, including a giant rally last quarter. The biggest trader of the day does indeed think Coinbase will stay stuck.

They spent $13 million on a calendar spread whose ideal outcome, is the stock stays right here at $190 through next Friday. Considering how Robin Hood and strategy were treated after their earnings, a crypto trade that goes nowhere at this point might be considered a win. Well, we'll see with Block as well. Oliver, thank you. And to that, Mack, tell us more. So, Scott, this is the first real gut check since Block CEO, Jack Dorsey,

cut nearly half the company's workforce. The layoffs were pitched as a productivity move, but severance costs could hit margins this quarter. Meanwhile, Cash App needs to show credit products and card spend are still driving gross profit. While Square needs to prove, it can hold pricing power as it moves into larger sellers. Morgan Stanley says investors are split. Bulls see Square and Cash App momentum plus automation savings.

Bears worry that Block cut too deeply and may have to spend those savings back on marketing and growth. Shares heading lower, 1% lower into the close. Okay, thank you. Mackenzie Segalis. All right, Christina, we do have a bit of a barometer on the AI and data center trade through Corweave. Yeah, and Wall Street, Corrieve, they're a little bit more optimistic because they expect

revenue to roughly double from a year ago. The company has gone from what we call a neocloud newcomer to what's starting to look essentially like an AI infrastructure play like AWS. In a single week, just in April as an example, Meta Lofton $35 billion through 2032. Anthropics signed a multi-year deal to run Claude. and Jane Street committed $6 billion. So those are three very different customers, all choosing Corweeb over building it all themselves.

The overhang, though, remains interest expense. This is a company funded primarily through debt and bringing down boring costs is critical to its profitability. The customer diversification story has definitely arrived. Now it comes down to whether execution can keep up with the balance sheet. shares down about 7% today. All right.

Christina, thank you for seeing the parts of novel. We've got Kevin Dreyer sitting here with me. When do you make of this market? It's good to have you back. Thank you. I mean, look, we're at almost all-time highs right now, but some sectors are only starting to persistently. I mean, we own a lot of industrials. We've had manufacturing PMIs now above 50 for four straight months. That's expanding. That's driven by that data center buildout that's going on and also area space of defense, but it's starting to broaden now. So we're seeing really strong organic growth from a lot of companies, M&A strong. And that's starting to expand and into other stocks and sectors. These guys aren't massive holders of these big marquee tech names.

So what's it like not owning those stocks? And even if you do, not in size or, you know, to overweight those. What is it like not playing in the most exciting pool out there right now? Well, first of all, a little bit painful, I'd say to start. But that said, there's lots of ways we can play it. Pictures travels, for one, company like Texas Inslee, It's, for instance, which, okay, it's a chip stock. It's the technology stop, but it had not kept up for years with what's been going on with the other semis.

Well, because it's more of an industrial. More of industrial. But now what we've had is that they've been in a downturn. They're starting to inflect. Data centers are 9% of their business or so. I think it grew 90% or something like that last quarter. They're starting to pick up, and they're really firing on all cylinders. And that's what we're seeing from a lot of companies that are using M&A to drive earnings growth going forward.

Amateech, ITT, a bunch of companies. You're focused on sports. too, right, through MSG and the spinoff of the Knicks and the Rangers. Yep, I mean, Knicks are up to nothing against my Philadelphia 76ers. It's a little painful, but as a shareholder... It's more painful. I hate to break it to you. As a shareholder, it's okay.

But what we'd say is that sports is a great business. It's a store of value. Franchise values are just going up. Stocks 3.30 or so, you know, we think it could be worth $500 a share. Man, you? You guys own that, right? We do own. I mean, things are looking up for the first time in a while.

I feel like the results on the pitch actually have lived up to some level of expectation finally, although not obviously from the heyday or anything, but at least it's a step in the right direction. Yeah, I usually follow a different football, but our analyst loves it. He tells me there's a World Cup coming sometime over the summer. Yeah. Is that a boon for everybody? I think it'll be a boon for everybody.

They just made the Champions League menu. So that means roughly $100 million of revenue to the company. So it actually means dollars. And we'll see. Somebody might want to own it. Stocks 19. You think it could be worth, you know, over 30. Do you surprise that the market has rebounded

in the way it has from the March low? Like seemingly everybody else is? I mean, look, we don't focus on what the market's going to do. We focus what companies and stocks are going to do. And that's why we look at financial engineering, M&A spinoffs. I mean, MSG, they said they're looking to separate the Rangers. That could surface value there. Honeywell, splitting it in two parts, airspace and automation.

that could surface value there. Textron just announced they're going to spend off their industrial business. So we're looking for ways independent of whatever the market's going to do where our holdings can end up realizing their value. Just an observer. I guess like we all are. It's good to have you back. Kevin, thank you.

It's Kevin Dreyer from the Goodbelly Funds. We'll talk to you again soon. Thank you. Thank you. All right. So the bell's going to ring. We're taking a break, obviously, today. We haven't said that much lately because we've been on these record closes for the

NASDAQ and the S&P 500 rather consistently. But as you see, we are read across the board. There is that really important earnings stream coming in overtime that I don't want you to miss. As I said, poor weave among the days of boarding. I always interested to see what they do and what the commentary is. I'll see you tomorrow and overtime with Mike and now.