Closing Bell - Closing Bell: The Record Run for Stocks 5/1/26

Episode Date: May 1, 2026

How much momentum is left in this market? Fundstrat’s Tom Lee tells us what he’s thinking. Plus, Morgan Stanley’s Erik Woodring breaks down his first take on Apple’s earnings. And, Ed Yardeni tells us if he thinks investors should buy in May. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

All right, guys, thanks so much. Welcome to closing bell. And Scott Wapner Live from Post 9 here at the New York Stock Exchange. This maker breakout begins. The stocks at record highs, a new trading month begins, and we will ask our expert what may might hold, including that man right there. Funstrat's Tom Lee. He'll join me in just a moment. In the meantime, I'll show you the scorecard with 60 to go in regulation. All but the Dow have been green for most of the day.

And it's just a fractional loser today. Apple is clearly the standout following its strong quarterly results. We'll speak with analyst Eric Woodring coming up in just a bit, and he just did something to his price target, too. We'll tell you exactly what. Microsoft and Amazon, another reason why tech is leading the way today. A big day as well for Oracle and Palantir. We'll follow both of those names. Nice gain, especially for Oracle. Some of the cyber names doing pretty well. How about Bitcoin? We haven't talked about that that often, lately anyway, knocking on the door of 80,000 yet again. It takes us to our talk of the tape, the record run for stocks, and how much momentum is really left in this market. Well, let's ask Tom Lee.

He is Fund Stratt's head of research, a CNBC contributor, and he is live as you see. Welcome back. Great to see you, Scott. Man, you nailed this thing. You really did. You had a sense that this market was coiled for a really big springback, which we've had. So what do we do now? Well, one, I think the market's rising for the right reason, Scott, because it's rising

because the tail risks are abating, and we've had good fundamentals. In fact, earnings have been good enough that estimates are going up. And the leadership is coming from the groups that we want to see, which has been the Mag 7 and the tech and the cyclicals. And that's what you want to see if the market is showing sort of economic resilience. So I'd say for now our base case is tracking. We still think we're going to make a good move towards 70, 300 for the S&P 500. And today we did raise software, which is also the ETF IGV, to beat a top

pick sector alongside Mag 7 and crypto. So let me ask you this. I hear you. Mark, it's obviously rising for the quote-unquote right reason. I mean, earnings growth in April, this is amazing, was projected to be 14.1%. Tom, we literally, we're clocking. 28% earnings growth. That's remarkable. That's why the market's been looking outside of the oil complex and away from the war and any of the other rising rates from time to time. The market is just not having it because it's busy feasting, feasting on these earnings. That's right, Scott. In some ways, like it's showing you that revenue growth, which has been better is delivering each dollar upside to revenue is delivering a lot of earnings growth.

So there is a margin story at work, which people would say is productivity, but it shows you the return on investment for the U.S. economy is also going up, meaning I do think that AI is, this is an example of AI actually having positive payoffs for the economy and for earnings. Yeah, what about tech, Tom, and areas of the market that, to some, at least, are starting to look overbought. And I'll get into that a little bit later in our A block here. But for example, one month, okay? In one month, the NASDAQ's up 15%. You've had a bit of narrower breadth in the market to which Goldman's Ben Snyder today says sharply narrowing breath has historically indicated equity market drawdown risk. S&P's up 14% from the low in March. The median S&P

constituent, however, remains 13% below its respective high. How do you reconcile that? I think that I'm going to look at this as a series of rolling bear markets because we know the Mag 7 and the software stocks peaked a lot earlier than the broader market did. And then they led into the low, but then bottomed first in our rallying. So I think, that we should expect breadth to follow, but it would be pretty textbook because, you know, tech is what peaked earlier several months earlier before the index level market actually peaked. I mean, we're almost at 7300 as I ask you these questions. 7238 is where I'm looking at right now on the S&P.

Where are we going, Tom? I mean, you figured we'd get here because you said as much when you thought we hit the bottom. But, you know, we've come so far so fast. Does that mean we've stolen some from the future and moved it forward? What does that tell us? Well, I know strong markets tend to, and I'm going to sound not very original, but strong markets stay strong. So I think the strength that we've seen is a good sign. And we also know when we look at the data that institutional investors caught the bottom.

But I think in this, in 2026, it's retail that kind of missed the low. but they have a lot of firepower. So I think it's going to be a retail-driven buying of stocks, and that's why I think broadening can take place because, as you know, retail investors do like small mid-cap stocks as well. But does anything worry you? Like the semis, some of these names, Tom, are just up insanely. I'm not saying it's not justified, but the moves are like, are you kidding me?

I mean, Intel, for example, is a double in a month, more so. You have some of the semiconductor names that are up like 70, 60, 50, 40 percent. And I'm not talking about a few either. I'm talking about, you know, it looks like a dozen or more have had absolutely parabolic moves. Scott, and it's great to see the recovery there because we know that there's shortage. We also have to keep mind it. Earlier this year, they all went into a cliff dive. The multiples for the most important, stocks are still very reasonable.

As we know, Nvidia is barely trading above a market multiple and still trades at a discount to what investors pay for, quote, safe stocks like Staples, Costco, and Walmart, which traded almost 50 times earning. So I think that the market is reallocating capital, which is appropriate. But I think that estimates are still too low in AI. And that's why we have low multiples because the earnings are probably even higher than we expect them to be. Wow. I mean, what do you think is the most underappreciated part of the market right now? Well, I think that the most contrarian trade to make is that software stocks probably have bottomed

because they've now reached a 10-year low relative to the S&P. So you're pretty much buying software as if this is 20%. 2016. And so software, I think, has upside. But if that's true, then the risks around private credit are probably overstated. And so private credit might actually do better. And that takes a tail risk away from the market. So I think software and parts of financials might be underappreciated at the moment. Interesting. All right. Well, we'll see what happens in May. We'll talk to you many times, I'm sure of that. Tom, thanks. Good weekend to you. We'll see you soon. Tom Lee. Let's bring in our panel now.

CNBC contributors, Trivary, it's Adam Parker. Requisite capitals, Bryn Talkington. Nice to have you both. Bryn to you first. I mean, Tom's, people will say, well, Tom's always bullish. But, I mean, there are degrees of bullishness. And he did look for a bounce back sort of like the one we've had. I think it's kind of surprised everybody to some degree.

You included, has this shocked you how much we've bounced back in just a short period of time? Well, I mean, since 2020 we've had, I want to say five, we'll call it whipsaws, where you get these 10 to 20 percent corrections. Within 30 days, we're back up. And if you remember, you know, last month, my biggest concern, way back when we were under the 200 day is history says you've got to get back above it within 30 days. And guess what we did? So once that was taken off the table, I've become much more, came much more constructive about the market. And I think to you and Tom's conversation, earnings, you know, writ large have just been incredible. And so I think that when you're just looking at whether it's margins, earnings, growth rates,

there's a lot of things to be excited about with this market. I do, though, think that with this run we've had, the S&P is about 5.5% over the 50 day. And not that it has to go back down to the 50 day. We are a bit extended here. So I would be surprised if we go much higher in the short term before getting some consolidation, because we are a bit extended here in the short term. Yeah. I mean, AP, this earnings run that we're on is pretty astounding, as I said. We were expecting 14% earnings growth like a month ago, and now we're doing 28%, which is just simply remarkable. I don't remember a time in which we've beat the expectation by that much. And one of the principal issues I think you had in the not so distant past is that you weren't so sure that earnings were going to be able to meet that moment.

And as you went further along in the year, I think you were more skeptical on that. And then the margin story too. And yet there is a resiliency to this market, to the ability of our great companies in this great country to operate, to keep their margins growing, and to grow their earnings to a degree that we just haven't seen in a long time. What do you think about that? Hey, Scott. Yeah. No, I mean, you know I like to be honest. And when I'm wrong about calls, I'm wrong. Look, we've had a great call, right? I came into the year saying I thought the multiple would contract for the market. It also had been worried about that.

And the earnings in the second half the year, the market went down. March 30th, we got bullish, and we said the grade eight would lead on the way out. So for a change, we're getting in right in both directions. And, you know, I still think the market's going to trend higher. I do think the earnings expectations are too high. But what changed my mind on March 30th in our note was just the level of earnings are so high. If you unpack what you said about the upside in Q1, it's important to know that in Q1-26, year-over-year growth versus Q125, 45% of the entire S&P 500 growth is from MicroNet, NVIDIA.

So basically, those two stocks are adding almost as much as the other $498 on a year-over-year basis. So I think that's a big part of the story you have to tell. Yes, the earnings are strong, but it's isolated to the revenue beneficiaries from the hyperscale or cap-X. And the second thing I'd just say is, like, look, I don't think you can use things like breadth. to predict the market return. You know, think about the last few years. We didn't have a ton of breath in 23, 24, and 25. Market ripped.

We had a lot of breath in Q1, and the market was bad, right? So I don't really think that's a great indicator. Personally, I think Nvidia and the market will be pretty tied. I don't think the S&P can be great while Nvidia's bad. I mean, I hear you on the contribution, if you will, of Nvidia and Micron to the earnings growth story, because Bryn has mentioned that many times as well. I'll give both of you that, okay? That will only account, though, for the dramatically outsized growth in earnings projections,

but it doesn't account for all of these other companies that are reporting really well. And surprising in their own right, which I think adds a little more credibility and durability, Adam, to the earnings story, that whenever I ask, for example, Bryn, about earnings. and expectations are good. The first thing Brin always said was, yeah, but NVIDIA-Micron account for the largest amount and yada, yada, yada. I get it. Like the deliverables are on the table. A couple of thoughts, okay? 70% of companies beat earnings, not 50-50, right? So I clearly the hurdle has been cleared by a lot of companies. I don't really believe what Tom said is right about AI broadly. I think that's actually

it's bullish and that more of it's in front of us. We track every company in the earnings called transcripts. Only 16% of the S&P 500 are even saying they're implementing AI yet. So I think the bulk case is actually more about productivity that's in front of us than what we're seeing now. That's probably the most bullish thing I can think of. The reason Walmart and Costco traded 48 and 38 times forward earnings is because people think their margins are going to continue to expand as

they predict their customer employee behavior better. So I guess the bullish thing is the AI productivity is more in front of us. The concentration thing is just that the AI revenue beneficiaries are the ones that are really, you know, crushing it now. So I'm not bearish on the absolute level of earnings. I just worry a little bit that as we get later in the year, expectations are high. And if I can point out one complacency when I do, we did two big dinners with investors last week, is just nobody is positioning for oil to say sustainably higher. and they're not shorting staples or discretionary

or playing weird stuff around the quarters to deal with the potential for downside. So that's one thing that I would say I'm focused on. Thanks for the look on the meals, by the way. But we're good anyway. Brin, I'll come back to you in a minute because I would suggest that one of the key issues

looming over this market is the number of areas that appear to some to be pretty overstretched. Jeff DeGraf is the chairman and head of technical research. Redesance Macro. He joins us. Now, it's good to have you back. You say, and I like the language here, because I want you to expand on it, you say we're dancing, not well, personal statement, obviously, but are also staying in close proximity to the door. Just inching closer and closer and closer. Why so? Well, you know, the way that we look at markets is, obviously, the tape is the

dominant factor, right? So whether we're dancing or not is really about the tape, Is the tape moving in the right direction or not moving the right direction? And right now it's moving in the right direction. How confident we are in that direction has to do with the underlying what we call conditional factors. And, you know, one of the things we do every, every, the first of every month is we update what we call our market cycle clock, which is really this juxtaposition between growth data and inflation data that we collect. And, you know, right now it's in a zone that all the way back to 1948, we look at this data. and it's in the worst zone that you'd expect for forward returns for the S&P.

That's because what we're seeing out of oil, and that's also because, you know, growth is kind of middling right here. So, you know, for us, the tape is the dominant factor. Are we bullish? We're bullish because of the tape. But given these underlying conditions, it's not usually a tape that you expect to see really, really strong forward performance out of. So, again, we're playing, you know, we talked on Tuesday about the bubble indicator that we have for semiconductor. Again, that makes us nervous. Are we still there? We are, but we'll be the first ones to really yank that cord as we start to see deterioration there. I mean, some say we're extended on oil, we're extended on chips, we're extended on Taiwan, we're extended on tech. Broadly, we're extended on AI.

To a technician's eye and ear, what do you respond to that? Well, I think that's, it's okay to be extended. You know, strength begets strength. I think Tom said something similar to that historically. But, you know, the work that we've done, if you double an index within two years period of time, there is a very high probability, you know, something that runs 75% plus that you're going to have a 30% correction in the next six months in that index. And so, you know, it's fine to think about things out the next three, five years. I get it. But the reality is once you start doing that, you're really sucking the oxygen out of the room. And I think we have to start thinking or at least considering what can go wrong in some of these things, then, you know, just kind of piling out what can go wrong. Right. All right. Jeff, we'll talk to you soon. Appreciate you jumping on. Like your notes and always like the conversation, Jeff DeGraph. Bryn, I'll come back to you.

What do you make of what he said? You agree with him? Well, I mean, always respect technicals, right? And so I think he's just like calling balls and strikes around what he's seen historically. What I will say, though, is it's never different. But what I will say is, as we're talking about these semis, memory, you know, et cetera, et cetera, the charts are going somewhat parabolic, but guess what? So are the revenues and so are the earnings and so are the margins.

And so there is this pull along, these numbers, the stock charts are moving along very much in lockstep with the earnings of these companies. So I'm very open. There always can be a misstep. There will be a misstep when that is, I don't know. But I think it is so impressive. These revenues and earnings from these companies that's still after this, they're still pretty cheap. And so I would end my comment on that.

You know, Adam, we're doing all this work in the market hitting these new highs, and we've just come off, you know, a month that set records for many of the majors from, you know, going back many years. We're doing all of it without the Strait of Hormuz even open. I mean, what are we going to do when oil comes down and the straight opens? Then what are we going to do? I think the Hormuz playbook will, you know, will come into more housing and consumer. rate-sensitive other stuff. I mean, I'm getting a lot of questions now about like inflation and how to, you know, inflation ETF. So people were trying to figure out the, the hormones damage before they play the other side of it. The only thing I heard here in this A block that I guess I have a different view on,

major different view, is I continue to think software will materially underperform. I think you're talking about 50% over the next three or four years for the median software company. So, you know, for us, it's been a consistent negative view. You know, we've said, I don't know. We've said, I don't 50 times our North Star is semis over software. And I continue to believe that. And so to just say you like software because it's cheap, I think that's not correct. I think you want to avoid cheap software companies and only buy the ones that are expensive or fast growing.

So I'll take a different tact on that. I think software is in a long-term decline just because the probability of 20-30 earnings being anywhere near what people think now is pretty imperative. Real quick, because you're a former semi-analyst. I mean, you ever seen anything like what we just witnessed in April? I mean, honestly. Not often, and it does worry me. It's funny, we all try to, you know, when there's a new stadium or something, is that a sign of the top?

You know, there was a DRAM ETF that started a couple weeks ago, and you unpack what's in there, and he might as well just call it like a 7X levered micron. You know, it's just all the Sandus, Micron, all that stuff. And the thing raised a couple billion dollars instantaneously. So it's hard to call the top of that. I think the memory is the most stretched part of that. But, you know, when you aggregate data, it can be misleading Scott, right? I mean, Micron's growing something like 200 percent earnings growth this year.

It trades at five times earnings. So people know it's over-earning. That's in the price. And as long as the level is so high, it probably can still be a pretty good stock for the next six months. We'll talk to you again soon. Enjoy the weekend. You both bring in out and out. Good weekend. I won't take care.

I'll invite you to dinner next time. Sorry. Oh, yeah, please do. Okay. Now to the stock of the day at his apple. It is higher after its earnings report last night. Our next guest just raised his target on the stock as well. Eric Woodring. He's the head of tech hardware research. Morgan Stanley joins us once against.

Good to have you. Welcome back. Thank you, Scott. So why did you bump your target by 15 to 3.30 from 315? Yeah. Simply put, gross margins were much better than we thought, both in the March quarter and as they guided to the June quarter. Again, you're just talking to Adam in the group about memory costs.

Apple is one of the largest buyers of memory, definitely in the consumer market. So we were a bit concerned coming into the quarter. What we could see in terms of memory costs, inflation, impact on gross margins, turns out that that concern was overblown. I'm not saying that's a concern that goes away, but this was Apple execution to a T. They have a special sauce there that they definitely are using in the June quarter. And so our gross margins went up. Our earnings went up.

It's kind of as simple as that. Wow. But how are they protecting the margins, though, when memory costs are undeniably, and they're continuing to increase? How are they doing that? Yeah. So, listen, what Tim Cook said on the call was that memory is a significant cost headwind in the June quarter.

It'll get even worse in the September quarter. The three things that they are using as kind of offsetting levers are mix shift, very strong iPhone growth, very strong iPhone growth at the high end of the portfolio. those are typically your more margin-rich products. They are pressuring their non-memory component suppliers. If you think about the bill of materials, the majority of the bill of materials is not memory. So they're pressuring those suppliers. And those are probably the two biggest factors.

Tariffs are probably getting a little bit better. And then the last one is still using low-cost memory inventory that they've had on their books. Eventually that will run down. But those are kind of the four main factors that they're using. using right now, I think kind of three of those are sustainable beyond the June quarter. We don't know how much memory inventory they still have. But then you get a new lever as we, as we move into the September quarter and the iPhone 18 launch, which is pricing. And we just published maybe two hours ago, Apple changing their kind of language in their 10Q talking about

the potential for using pricing as a lever to protect against memory costs. So that's in our model. But that's going to be a new lever that we have moving into the September quarter that we don't have in the June quarter. What do you make of China plus 28 percent? I mean, this was a real sore spot for this company for what feels like the longest time. And it's like 20 percent, I think, they're about of overall revenues. So is it back? Is that business firmly back? I'm not going to go insofar as to say it's firmly back. We've seen basically a solid year of performance, not totally consistent, but if you remember back to the June quarter of last year, it was really when Apple started leaning into promotions in China. There were federal subsidies or national subsidies

in China that kind of helped to kickstart demand for the iPhone. But the last two quarters have been, you know, lights out, 40% plus growth in the December quarter. I think it was 37% growth in greater China in the March quarter. You know, there's two things. One, China has been a declining business for Apple for the better part of five years. So we're just seeing elongated replacement cycles kick in and people just upgrading their phone in China. And then secondarily, you know, we've written about this as well. There are challenges in the broader smartphone market. And what Apple was talking about on the call last night was record switchers in the quarter,

meaning users coming from basically Android phones and buying iPhones. That's happening in China as well. So is that sustainable? We'll have to see. but ultimately, you know, China is a bit of a fickle market. But what really excites us about China as we look forward with Apple is the launch of a foldable. China is very much an aspirational market. The foldable is the first kind of major form factor change for Apple in more than a decade.

That's going to be very good for China. We think, you know, we think China is going to be a big base for foldable shipments come September with the foldable launch. That could help to maybe sustain growth out there. But we'll see again. China is a fickle market. Let's talk about the baton pass from Tim Cook to John Turnus. And whether you think it's fair, if I was to say, okay, we're going from a supply chain expert, an operating expert, an operator maybe more so than an innovator.

If you don't think that's a fair assessment, then please say so, to a product guy who maybe is more of an innovator than the others. that I described Tim Cook to be at the very highest level, who did an amazing job undeniably during his stewardship of this company. I think that's well thought by just about everybody. In the anthology of where Apple is now, and they were lucky probably to have Cook at a time when they had to get through some really difficult supply chain issues, the pandemic and otherwise,

is this the right kind of leader at the right time for this company, given what the challenges are moving forward? Sure. I guess maybe just touching on that kind of innovation comment, you know, what Tim Cook did besides kind of supply chain prowess was he turned a cyclical hardware company into a technology platform, right? Look at how the multiple has expanded under Tim Cook's leadership. I'm not saying that financial returns and buybacks didn't contribute to what we saw,

But we've seen, you know, in the March quarter, services was 43% of gross profit dollars. Rewind 12 years ago, it was effectively nothing. So he did an amazing job at innovating to turn a hardware company into a technology platform. I think John Turner's entering the CEO seat is interesting, right? You do bring back a product guy. You know, we don't really know how much of a maybe Steve Jobs type of, a figure he necessarily is, but he played a big role in the iPhone 12 launch. That was the last super cycle.

He played a big role in kind of reinvigorating the iPad lineup, the iPad Pro, for example. He does, or at least it's been reported, that he has an eye for kind of expanding the hardware portfolio around different AI tools. That could be a pennant, that could be a tabletop robot. So I think we bring some kind of interesting optimism, maybe is how I'd put it, with John turnus in the seat. You know, we heard from him last night very briefly. I do think people generally like that we have a product guy coming into the CEO seat. But importantly, Tim Cook remaining chairman means that he will deal with some of the geopolitical challenges that Apple has faced. He's gotten

through that masterfully, right? He's negotiated with Biden, Trump, Xi, Modi around the world. So having Tim to be able to stay there and help John Turnus as executive chairman, I think. think is still very helpful for the overall Apple story. Yeah, I'm sorry. I think he has proven to be one of the most deft maneuverers in geopolitical and political circles than we've seen that we've ever seen in this in the CEO suite. But we'll continue to talk about legacy at a different time. Eric, I appreciate the time always. Thanks a much, Scott. Yeah, Eric Woodring. We're just getting started here up next, drilling down on oil, a pair of earnings movers under pressure today. We'll tell you what's weighing on that space coming up next. We're back. Oil's falling today. Exxon and Chevron.

both lower after reporting results. Pippa Stevens here with a look at the energy space force today. Why are these names down? Well, Scott, let's start here with oil, because it is taking a leg lower after earlier in the session. Iran sends an updated peace proposal to mediators in Pakistan, although President Trump later said that while Iran wants to make a deal, he's, quote, not satisfied with it. Meantime, Exxon and Chevron both did beat on the bottom line, although profits were down significantly from a year ago.

The surge in oil prices beginning in March did help to offset some production out but barrels are still offline, especially for Exxon. CEO Darren Woods telling CNBC about 15% of the company's output has been impacted by the war. He also said the market has not yet seen the full impact of the supply disruption, saying, quote, there's more to come if the straight remains closed. Now, the administration has called on big oil to increase output, but Exxon and Chevron not meaningfully adjusting their production plans at this point. Scott?

No, in fact, the CFO of Chevron said specifically, in an article that I read. They're focused on free cash flow. That's right. Not drilling. That's right. And they have said again and again that they are focused on sustainable growth,

steady growth, and shareholder returns in the forms of buybacks and dividends. That has been their priority and continues to be their priority. And also they're not going to make a decision now that won't come to fruition maybe six months a year in the future, especially with how volatile prices have been, and especially given where the curve is currently sitting. If you're looking at TI in the 70 range for next year,

that's not going to incentivize a big uptick in production here. Yeah, that's a new day for investors in the energy space over the last few years. Pips, thank. That's up Hippas Stevens, of course. Up next, Ed Yardini is back. He'll tell us if he thinks investors should be buying in May. And later, looks like there could be a major shift happening in the MAG 7. Details just ahead.

All right, welcome back. Stocks making new highs to kick off a new month of trading. Our next guest says it could be more room to run. He is, Ed Yardini. of your journey research. Welcome back. Thank you. So you say we're still riding the rails on the Roaring 2020s Express, but let's be honest. I mean, there were times over the last couple months that you thought we were going off the rails. You had raised your recession indicator, expectation, and all of that. And yet here we are. How did we get here? Well, as you know,

I also stayed quite firm with my year-end target of 7,700. I did feel that, uh, political crises in the past have been buying opportunities. And I did think that could be something like a 10 to 15% correction. It turned out to be a 9% pullback and a little bit more of a correction in the NASDAQ. I think what happened is we did see the evaluation multiple take a dive, the PE. But I had been pointing out all along that earnings have been remarkably strong. that at some point the investors would realize that the reason the P.E. was coming down

wasn't just because the S&P 500 price was coming down, but also earnings were going up. In other words, the market was getting cheaper. And March 31st at the end of that day, I said, I really thought that March 30th was the bottom. So, yeah, along the way during March, I said, I reserved the right to change my mind as often as the president.

And basically, I think I got it right, though. It's interesting because we felt like we got to a place when the multiple that had expanded to like 22 times, you know, that we weren't going to be able to live on multiple expansion anymore. We're going to have to get an earnings-driven story. Yep. Not only did we get an earnings-driven story, but we did it after the multiple had already compressed. Correct. So you got the best of both worlds. Best of both worlds.

It was actually even better than what we had last year, right? So, I mean, last year and this year are looking very similar, except earnings are an all-time record high. So what do we do now, right? We've come a long way in a really short period of time. Do you look at that and say that this has gotten a little bit out of hand, a little bit overstretched, or do you say no, that this story is still intact? There's enough momentum to continue to carry this market higher, barring some unforeseen development out of the Middle East. Well, I think we're on the, as I said, the Roaring 2020's Express train. We've been on it since the beginning of the decade.

There's August of 2020 that I thought this could be an amazing decade of productivity and technological innovation. I didn't see the AI technology coming when it did. It came in early in the decade. And it's obviously been carrying us. But this earnings momentum has been pretty widespread. I mean, it takes all kinds of different businesses other than to. businesses to build data centers and to provide air conditioning systems for them and provide water. And then meanwhile, consumers are just using AI. Businesses are using AI. And that'll probably

continue to power this market still higher. I'm still using 10,000 by the end of the decade. And obviously, we're getting closer to that. We don't have probably, I think it's fair to say, a Fed that's, you know, maybe as friendly as we expected them to be, given what's happened with inflation. I don't know, you know, to what degree the Warsh tenure, at least the beginning of it, is going to impact all of that. But baseline is we're getting fewer cuts than we thought, right? That's fair to say.

Does that not factor into anything? Because the economy's just simply humming along good enough, and the labor market is staying strong enough that it just doesn't matter right now? Well, that's been really my pitch since 2024 when the Fed started cutting rates. I was saying the economy is doing fine. You don't have to cut rates. You cut rates. You run the risk of having a speculative bubble occur.

But yeah, I think the economy has demonstrated that we're in Nirvana. We're at that neutral interest rate. The Fed funds rate should be left at 3.5 to 3 and 3 quarters percent. The bond yield is doing just fine. I think the range is 4 and a quarter to 4 and 3 quarters percent. I think interest rates are exactly where they are, where they should be in order to keep the economy just humming along. And as you said, and to push the stock market higher.

I'll talk to you soon. Good weekend. Thanks, Seth. Thank you, you too. All right, thanks, Eddie R, Danny. Coming up, we're tracking the biggest movers as we head into the close today. Julia Borsden is standing by for us. Hi there. Scott, Three Giants, the social media, streaming and gaming space,

all moving following their earnings. reports. The names to watch after the break. About 10 from the closing bell. Let's get back now to Julia for a look at the stocks as she's watching. Tell us, please. Reddit shares are soaring after reported better than expected earnings and revenue for the first quarter. The social media company's daily active users climbed about 17% from last year to about 127 million. Shares up roughly 15%. Roku shares are also in the green on the back of its Q1 report. The company raising its annual platform revenue forecast as advertisers continue to spend on its streaming platform. Shares up about 6%. And Robloch shares are in the red after the online gaming platform slash its

guidance for full year bookings. The company said its new age features slowed new user acquisition and caused greater than expected headwinds. Shares are down about 18%. Scott? All right, Julia, thank you. Julia Borson. Coming up next, 314's Warren Pyes. He's standing by to break down the final moments of this trading week. Market Zone's next. We're now in the closing Bell Market Zone. Mike Santoli in 314's Warren Pye is here to break down these crucial moments of the trading day, plus Oliver Renick standing by live from Sibo Global Markets in Chicago. Get to him in a minute. Michael, I'll begin with you. You're, of course, in Omaha. What are your views on this week? We did a lot of work. We got the mega caps for the most part, all out of the way.

Absolutely. Look, Scott, it never stopped being a bull market. but the leadership of this bull market has obviously reasserted itself in the last few weeks. You know I've never been a broader is better guy in terms of whether it has to be every stock participating or the main leadership. We might be overdoing it on the leveraging to tech momentum here a little bit in the short term. But I think it makes a lot of sense because the reports we got, and yes, the market reaction, as I suggest at the time, was not uniform in terms of meta, Microsoft, Google, all the rest. What it did, though, is it said we have three months until we really have to worry about the underlying theme changing very much in terms of AI CAPEX demand. And the market decided that the way out of geopolitical uncertainty is toward some kind of an AI hardware bubble. I don't think we're there yet, but it's in that direction and we're kind of melting toward that.

And in a world where there's a lot of uncertainty, certainty gets a premium. Now the questions are we overpaying for that perceived certainty in the AI? trade. I think that's where we are. Are you going to work the Berkshire coverage into 4 o'clock with Mel, top of the hour? Well, it doesn't hurt to have Apple up three and a half percent. It's still 20 percent of the Berkshire equity portfolio, and that's kind of a nice reminder that that's been a huge winner for them. And then it's really getting to the question of whether, in fact, the way the market has been so strong has reduced the opportunity set for a big potential buyer like Berkshire, which has all that cash, but also a ton of patience.

Yeah, yeah, and I don't like to pay at the highs. We know that. So we'll see. Mike, we look forward to it. Sure. Absolutely. Thank you. That's Mike Santoli. Oliver, the Options action from Chicago looks like what today? Bowles found a new AI hero this week, Scott. It's Google Parent Alphabet. Stock rallied more than 10 percent, sending its market cap above $4.6 trillion and within striking distance of Nvidia. Options traders think it will be crowned market cap king this month. Volatility and the 400 strike call contract for Alphabet is pricing in a more than 50% chance. The stock will cross $5 trillion before Nvidia reports on May 20th. If that happens, it'll be the first time since 2016 that Google's been top dog.

And at the same time, action in Nvidia has soured a bit with notably more call contracts being sold today than bought. That might be because Nvidia has fallen after four of its last five earnings reports. But it doesn't seem like Bullscare who leads the AI race to Mike's point as long as the race is on. Vicks today touched 16.4, its lowest level since February 3rd. Wow. Yeah, the race is on, that's for sure. Oliver, thank you.

Oliver Renick from Cebo up in Chicago to Warren Pyes now. All right, we're going to have an extended record close again today. S&P is going to do it. NASDAQ looks like it's going to do it as well. So now what? as we go into a weekend and then we really get heavy into May. Yeah, I think from my point of view, there's two big forces opposing each other. And it's the AI bull thesis that Mike and Oliver touched on there.

And still the Strait of Hormuzus is lurking out there. And clearly at this point in time, the equity market has seized on to the AI thesis. I mean, from our perspective since early in May, the right position has been to overweight your equity. along with an overweight commodity because I think still the only real risk the flying the ointment is what could happen with oil prices spiking. So that's my concern, but I think that everything has really changed

with the compute story and the semi-led rally and the reaffirmation of all the CAP-X that we've seen from MAG7 this week and just the belief in AI. So that's what the leadership is. And I expected to continue without a huge disruption in the Middle East. So then just because you're overstretched

really doesn't mean anything. I mean, if we're, if we're overstretched for the fundamentally right reasons, and we don't even clearly understand what that, that runway still looks like from an AI perspective, you don't have any pause based on, I mean, I could probably point to four or five different areas of the market that people who watch this stuff for a living say, I'm getting a little queasy. Yeah, I mean, I think there are pockets where things are overdone, but they're overdone kind of for reasons. I mean, going back to March when we talked, we talked about our GPU availability index, the stuff that we watch on a daily basis that pointed to this record surge of compute demand. So it's not like there's not a reason for what's happening in the simies in particular.

So I think that's one area everyone's kind of concerned about, but it makes sense to me. sentiment doesn't look stretched to me. When you go through one of these 10-day momentum surges that we had off the bottom, you really don't get a big correction to store. It's kind of counterintuitive, but when you get a momentum surge, which we saw one in 24, we saw one in 25, and we got one this year too, it's kind of you're off into the races. It's kind of a lockout rally. And so I don't think there's enough positioning with how fast this move has transpired for the big guys. I think that they're all kind of under-exposed still chasing.

Wow. It's apropos, I guess, to have National Investing Day here at the New York Stock Exchange and a collection of folks are going to ring the closing bell. It shows you the power of just staying invested. And that's been hard for some at times because of volatile moments, the war and oil. You guys are not wavering, though, on your target. S&P 500 target of 7850. Yeah, back in 2024, we ruffled some feathers because we said that come 2026, the S&P 500 would hit. And I said this on your show, the S&P 500 would hit 7,000 and still would have be overvalued. I think that the train continues.

I think there's still too much disbelief when it comes to valuations. And honestly, not enough of appreciation for the secular change that's coming with AI. So to me, those are the two big factors that we're watching, I can't expect it for much to continue. Bringing the bell, and they're ringing in a new high, a new closing high for the S&P and the NASDAQ.

I'll see on the other side of the weekend. The mic and bell.