Closing Bell - Goldman’s John Waldron on the Market 6/3/26

Episode Date: June 3, 2026

Scott Wapner speaks exclusively to John Waldron – Goldman Sachs President and COO – about market exuberance, the AI arms race, upcoming IPO’s and more. Plus, top tech analyst Mark Mahaney gives his take on Alphabet’s upsized stock sale. And, we run through all the key metrics to look for from Broadcom and Crowdstrike’s reports in Overtime. 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. I'm Scott Wobner live from Post 9. Here at the New York Stock Exchange, this make or break hour begins with an exclusive interview. Goldman's president and chief operating officer, John Waldron, on all things markets today. In fact, I want to show you what the markets are doing today. We are mostly red as the Middle East weighs on investors. Oil and bond yields, they are rising today. Let's put a bit of a damper on the high-flying tech trade, at least for one day. And we will follow everything right into the close today. Let's get right to it, though. And welcome in, John. He's here with me once again at Post 9. Welcome back. It's great to have you on. Thank you, Scott. Always good to be here with you.

So let's start with the tech trade, because I think that's sort of captivated everybody. David told Leslie Picker yesterday that we're in a period where there's, quote, more greed than fear in the market. I'm wondering whether you think there's too much exuberance in this market. Well, I think David frames it well. I think that there's always that, you know, kind of meter between greed and fear. and I think right now people are feeling more agreed. You know, whether it's exuberant, you pick your word. I think exuberance is a pretty good word. You know, we're seeing extraordinary demand for anything that's in that AI ecosystem

that particularly, I'd say, looks like it's part of the infrastructure layer that's building the compute for the future. And so, you know, the appetite for that continues apace. We're seeing evidence of it all over the place. You know, I'm not going to predict how long it's going to go and when it's going to end and what the catalyst will be, but right now the demand is quite strong. But if we use the word exuberance, how will we know when that becomes irrational? Like you see stocks today, and you've seen them, of course, you're watching the market, go up 20 and 30% individually in a single day, events that used to be special in time, and now they feel routine. Yeah, it's unnatural,

it's unprecedented. I think there's no question about that. However, I do think that we are in the age of a big revolution and how technology is affecting the economy, affecting the world, affecting companies, affecting individuals. You know, it's an industrial revolution of sorts. We're going to see how dramatic that is. I don't think any of us really know the answer to that question. I do think there's evidence that the microeconomics of some of this infrastructure bill are pretty attractive.

And so, you know, these are companies that have extraordinary profits, extraordinary cash flow. It's not the exuberance of other eras we've seen exactly. So, you know, I would still maintain a fair bit of conviction that we have a ways to go here. So when you say it's not the exuberance of eras, you know, gone by, you sound like you're talking about 2000, right, the dot-com era. So we're not in a period now because people are looking for analogs back then, like, oh, this is 1995. This is like when Netscape went public, or is this 97, or are we approaching 99? Is there no analog to what happened then and what's happening now? I believe history rhymes.

I'm not sure it actually repeats. So we've got to find the rhyme, not the repeat. I don't know what the right analog is. I do think if you go back to the dot-com era, there are two elements of the dot-com era that I recall pretty directly. One is we had a lot of companies that had no revenues and no profits that were getting extraordinary evaluations. That's not what we're seeing right now.

There are some companies that will not have profits, but they've got consequential revenues, a lot of growth, and the prospect of reasonable profits on the horizon. And the second thing is you had that infrastructure layer in the dot-com era. I think Global Crossing, Level 3, these companies that were laying the broadband, they, again, were not companies that had particularly great financial characteristics at the moment. You had to suspend disbelief to see what was going to be on the future. Again, here, the companies that are delaying the infrastructure layer are quite profitable.

So I agree with you that there's unprecedented moves in the stocks. That can be off-putting. But I think the fundamental microeconomics are way more attractive than we've seen. and prior iterations of this. I guess it, to answer the question, I guess it depends on where we think we are in the buildout cycle itself. Tony Pascarello, who heads hedge fund coverage at your shop, I read his stuff all the time. He was out with a new note today in which he was pointing out the hyperscalers and the infrastructure firms are accounting for two-thirds of all S&P earnings growth so far in 26. The question is, in his mind, whether we are either at or near peak

growth because that matters. If you're near the peak, then maybe the other side of this isn't going to look so great, but he comes to the conclusion after talking to the portfolio strategy team at Goldman, not necessarily there. Or maybe not even close. Yeah. First of all, I read Tony's work religiously as well. I have the opportunity to talk to him probably more regularly than you do. And I think he puts out great analytics. He certainly does. My view would be the following. I think that we're in the infrastructure build phase of this revolution. We're going to shift at some point to applications and deployment for companies like ours that are not building the infrastructure, we're financing the infrastructure, but we're not

building the infrastructure. We're not an AI company. All these large enterprises are going to have to start deploying, garnering these efficiencies, these productivity enhancements that's going to drive the productivity in the economy. We're not really yet in that part of the phase. We're still in the infrastructure built. So I think you could, if you wanted to take an optimistic bent, which I tend, what I would tend to want to do, is you're going to see more, I think the infrastructure build is going to go on for quite some time. I think yesterday's news around Alphabet is a really good marker in that regard. They were pretty declarative about their desire to spend and their desire to finance that spend in a responsible, intelligent manner. And so I think you're going to see

a lot more infrastructure spend, but it's going to start to transition to enterprises deploying and enterprises unlocking productivity and enterprise is delivering better value proposition to their end customers. When we see that part of the phase, we could see another leg up. You might see value change shift. You might see stocks readjust. You might see more value going to those that are deploying as opposed to the infrastructure layer. I could imagine that. But I think that could be another leg up in the scheme of this broader ecosystem. What if people suggest that there's just simply too much riding on the AI story in general? I thought there was an interesting FT headline today that I'll read to you and get your reaction to it. America's AI boom is carrying more than investors

admit the economy, the profit cycle, and the market narrative are all leaning on the same narrow pillar. You agree with that? If that's the case, what do we do? I think we all should worry to some extent that it's a narrow singular bet that's being made and that's driving asset prices. I have a hard time disagreeing that that's something that's worthy of concern. But I do tend to go back to, are the microeconomics attractive? And are we doing something that is fundamentally creating enormous value in the economy. And I think that at the moment, evidence points to the fact that we are. And if we get a one or two percent productivity unlock in our economy, let's just say in the U.S. terms, that's pretty substantial. And that delivers a lot of value

across the system, across society. So I still think that that's the likely case, but I would agree that the narrowness of this trade, if you will, you know, has to be concerning on some level. As much as you travel, and it's obviously a lot in your role, and you talk to CEOs all the time and business leaders and investors, where do you come down on the jobs displacement story? I mean, David wrote an op-ed recently, taking the other side in large respects of the doom and gloom scenario that some are painting, including some pretty reputable people. I mean, what do you think from who you're talking to? Well, I agree with David's fundamental premise that the jobs Let's just say in the United States, the labor market is very dynamic.

And there's a lot of velocity of jobs coming in and jobs going out. And he pointed that out. And so I think people forget that there's a lot of moving pieces in this labor market. And I think it's good that he pointed that out. You know, I think there will be more disruption by definition because companies, as I said, when they deploy AI are going to start re-engineering processes and there will be jobs that come out of that, there'll be new jobs that go into that. I don't think any of us are smart enough to know exactly where the equilibrium is going to be there. At the moment, in the infrastructure

build, we have a massive need for certain jobs, construction jobs, electrician jobs, plumbing jobs, et cetera. You build a $35 billion data center. You actually do need some people to do that. And I think that's actually a pretty tight part of the labor market right now. So to me, a lot of dynamism. I can see a significant amount of disruption. I worry about the re-skilling. Another part David's op-ed. I think the rescaling is going to be a significant societal issue. I think the public sector and the private sector are going to have to spend a lot of time on that. I think it's a good example of where public-private sector partnership could be important here. That's not typically the strong suit of our country. I think we're going to have to figure that

out. But I'd be generally more constructive along the lines with David outlined in his op-ed. Interesting. Capital markets, you must feel really good about what's happening. I mean, we're on the cusp, we think, at the end of next week of SpaceX, which you're obviously as a firm leading on. The first of what is going to be a blockbuster run of IPOs from your lens. I mean, how would you assess what you see? Well, I would say if you do what we do for a living, this is a very fun time. The folks that are in our building where I just left are really excited to have SpaceX launching. We're really excited to have just seen the alphabet equity raise.

this is extraordinary. And we're excited, but we're also humble about it. You know, we have a lot of work to do. We have to do a good job. We have to do a responsible job in allocating this capital, raising this capital, putting it on the right hands, having these equities trade well is important, giving confidence in the system that we can raise the capital and that the system can absorb it, which we believe deeply that it will.

I was going to ask you about that. I mean, because that is a question that people are asking. You bring these enormous things of scale, right? Google's $85 billion, you know, SpaceX 75, and then you've got Anthropic, which just came out, too. You're co-leading on with Morgan Stanley. You'll get Open AI. I'm sure you guys will be in the mix there. That's a lot to come to market.

It's a lot, but let me just give you a couple of facts, right? So if you assume the IPO market year to date is $90 billion of volume. It was really about $150 to $200 billion of volume for most of the last five years. And if you go back a little further, like pre-COVID, it was kind of $200 to $200. 225 billion of volume. So we're at 90 year to date. We've got a lot coming in the second half of the year will be bigger than the first half, more than likely. We're probably going to be at $180 to $250 billion of volume this year in the IPO market. So it's a lot more than we've seen in the prior four or five years, but not actually that much in the scheme of the overall

history of the market. And then obviously market cap is a lot bigger. So if you take a high number like $250 billion of IPO volume, it's going to be like 14 basis points. of global market cap, which is actually lower than the average amount of global market cap IPOs have represented during most of the last 15 or 20 years. So by that measure alone, this is really not a massive absorption problem. We've also got $9 trillion of money market funds in the United States alone, which is an enormous amount of liquidity that can be swing liquidity to come into $250 billion of IPOs. So these are large transactions, no debate about that.

but the absorption capacity, we believe, is there in spades. And I would say these are obviously exceptional companies where there's tremendous demand for this, as we said at the outset of the discussion, tremendous demand for this capability. So, you know, we remain very constructive on balance. How are you thinking about, I know our viewing audience, retail community, is looking at IPOs that are just different from any other period of time, I think in our history in terms of how long these companies have been private, how much their valuations have gone up as private companies,

and then what that might mean as they become public, the way that they trade. I mean, how are you assessing and thinking about that issue in and of itself? Yeah, it's a good issue. It's a good point, and it's complicated. I think you're going to see the indices adjust accordingly, you know, which is not the typical move where a company comes public and goes right into certain indices. So you're seeing a shift in that dynamic, which I think is intelligent because you have these companies at this size, they represent an important part of the U.S. capital markets

and the global capital market. so they should be adjusted accordingly. You know, I think that it's really just a size and absorption issue. You know, it's, as I said earlier, we typically would do smaller deals that are, we're not worried about the absorption. Here, these are bigger deals, but I think the absorption is there to be, to be hot. So it's not too concerning for us. Equity markets wide open.

The debt markets are seemingly wide open. Good for M&A. What's your outlook as we... We're constructive on the capital markets, equity and debt. Yeah. You know, you've obviously got credit spreads are very... tight. So I think that, you know, that it's a very good opportunity right now for companies to issue to issue debt. I expect that to continue. There's plenty of supply of credit in the

economy right now. We've just talked about the equity markets. You know, you can, you can debate valuations, but there's significant demand, particularly for anything in that AI ecosystem. The MNA market may have a record year this year. The record year was 2021, you know, right at the height of COVID, $4.6 trillion of MNA.A. We're over $2 trillion. dollars year to date. Backlogs are strong. Biase for consolidation is significant. Corporates want to get bigger. We see it across the economy. We're nearing a trillion dollars of volume at Goldman Sachs alone. So we're quite constructive on the M&A market. And I think that industrial bias for scale will continue to drive volume and activity. Interestingly, private equity, which has historically for the last

five or ten years been a big driver of M&A is slowed down. So I think private equity volume is down 4% year to date. Corporate volumes up like 75% or 80% year to date. So you have a significant dichotomy between those two. I expect that to change. I think the corporate volume will continue to stay high. I think the private equity volume will start to increase as those companies mature into their valuations, as long as markets stay reasonably compliant.

From private equity to private credit. Today it feels like it's a little bit of an issue. A lot of the alt names are down. You hear about more redemptions around the way in that universe. But I don't feel like we're focused on it or fixated. Maybe it's a better word like we were in that moment of time a few months back where it was like every day. We were talking about it.

How concerned are you about it? I think it's a good thing that you're not talking about it every day because I don't think that was necessarily not you personally, but the broader you, I think it's not helpful to be kind of creating too much concern about it. It's a $2 trillion market. it's not a systemically concerning marketplace. We're not going to have a big private credit problem if we don't have an economic problem. If the economy is going to grow two, two and a half percent, the private credit market's going to be just fine.

There will be more dispersion. There was a lot of software bought during that era, that era of growth in private credit. So if we have more disruption in software, we could see differences in people's performance. But I think too much has been made of the broad concern. concerns around private credit. I do think liquidity in the hands of retail and wealth investors is something to be focused on. I think that the way people absorb private credit, it should be thought of as illiquid. It should be thought of in your liquid bucket, not in your liquid bucket, and I think that's an important consideration. But broadly speaking, we're not overly concerned

about private credit. Let's finish on the Fed. Your expectations for a Kevin Warsh-led Fed are what? I think that he is going to make a fair number of changes in the Fed. Reforms. Yeah, I mean, he talked about it, obviously. He's talked about it multiple times. I expect him to focus on the balance sheet and think about whether the Fed's balance sheet is too large and too involved in the economy from that advantage point. So I expect him to spend a lot of time on that.

I bet they're going to spend a lot of time debating inflation and the measures of inflation. He's talked a lot about this trimmed mean concept. And so I think there'll be a lot of academic debate inside the Fed about how to think about inflation, which will probably be probably the most challenging task is to navigate that. Less communication, you think, is going to? I don't know. I mean, he's certainly indicated that he may have less guidance going forward. But, you know, I think we should watch and see what he decides to do in that regard.

Does that matter to you if they speak less publicly, if they take away the dots, the forward guidance that matter? I think that you could argue that there's almost too much going on and too much communication. There's some, you know, none would be not good. What we have now might be too much. There's probably a middle ground. So, you know, I have sympathy for his view that there may be a better way to do it. Okay. Lastly, do we're going to get a cut this year, a hike this year, anything this year?

What do you think? I don't know. Our estimate, our forecast, Jan's forecast would be that we will like to. still get a cut before the end of the year. It feels to me, we have active debates in our firm about this. One thing I like about Goldman Sachs is we don't really have a house view. Yon is extraordinary and has lots of very strong and, you know, well-held views. As a more practitioner, not an economist, I see a lot of inflation in the economy. I see a lot of inflation in PPI, you know, which may not all have been passed through to CPI, but I think it's there in the system.

It would lead me to believe that it's less likely that we may see a cut right at the moment. I think the labor market's still relatively tight. But I'm not the economist. You should listen to the economists. But I would come down on the side of more inflation for longer. Well, we enjoy listening to you. I'm glad you shared your views with our viewers. Thank you for being here.

Thanks for having me. It's John Waldron of Goldman Sachs. We're just getting started here. Coming up next, the Star Tech analyst Mark Mahaney joins us live. We get his take on Alphabets, upsize. to stock sale. Meta's 4% moved today in the late afternoon. That stock is bucking a trend today in Big Cap Tech. We're live with the New York Stock Exchange. You're watching closing bell on CNBC. Welcome back, Alphabet shares lower again today following news of that company's now

upside at $85 billion equity offering to help fund its AI buildout. It is one of the stocks Mark Mahaney covers for Evercore ISI, and he joins us now. It's great to have you on. Thanks for being here. Hey, Scott. You know, I was going to ask you about that first, Then I look down, I see this move in meta today with this AI agent for business. What does it mean? Why is the market reacting the way it is to this news? I think it's reacting the same way it did. I think it was last week when they rolled out or announced a subscription product.

Today, the subscription product is geared specifically towards small businesses. But I think people have sort of lost something about meta. And it's been in this penalty box at like 17, 18 times earnings. they are developing a frontier large language model, and they have a lot of ways to monetize it, that the market's sort of forgotten about it, and the subscriptions is one. So all of a sudden, they're diversifying the subscriptions

on the consumer side. That was last week's trade-up. Guess what? They can do the same thing on the merchant side. And do they have large enterprises on meta, on Facebook? No, but do they have millions of small businesses around the world that use WhatsApp for their business communications? Yes.

And this is what they're rolling out today. So, you know, it's one of the reasons I think this is one of my favorite stocks in large-cap internet. It's, uh, the valuation is really inexpensive. And people are underappreciating the ability for this company to monetize a lot broader than just, you know, ads on Instagram and Facebook. What's the biggest takeaway from the alphabet offering in your mind? I got two, Scott. One is that when Google told us, their alphabet told us on the last earnings call that they were going to substantially or significantly, it was one of those S words, increase their cap-exp spend next year, uh, they mean it.

So they're coming to market and they're raising capital. And so that's that's one, which is there's no end. There's no near term end. I'm sorry, no near term end to this compute cycle, this compute capex cycle, triple C's there. The second thing is the market's okay with it. I know you pointed out, Scott, that the stocks traded off. I mean, I'm sorry, this is an equity offering. It's a dilutive equity offering.

Of course it's going to trade off. But the fact that the deal got upsized and the stock is, you know, trading off two or three percent, you know, off that. I read that more of the fact that it got upsized that tells you how much interest, no, better yet, Scott, how much confidence the market has in Google, whether it's a little bit overstated maybe, but they should have confidence in it because it's the vertically integrated AI winner to date. Where are we? I asked this, and I was speaking with John Waldron of Goldman Sachs about this topic a moment ago,

sort of where we are in the cycle, the earnings cycle, the growth cycle, two-thirds of S&P earnings in this year thus far. coming from tech and AI infrastructure plays. I think it's critical at some point to understand where we are if we're close to peaking. If this runway is even longer than we thought, the cement trucks just keep going down the runway and laying more concrete. I think your logic has to be that those cement trucks are going to keep rolling down for quite some time. Maybe at the beginning of the year, I wondered myself whether this was going to be the P-Captex year. It obviously is not going to be.

I just spent the last two days at our tech conference here in San Francisco talking with a lot of venture capital investors too. And there's no sort of rationalization coming up anytime soon. I know there's a few stories about this, but I don't believe them. I know there's no rationalization coming up in token usage anytime soon. Token usage is still going to grow at an extremely high rate. I don't know whether the KAPX cycle is going to stay at this high level, but it's going to stay at a really high level. You're hearing that from Google. That's why they did the financing today.

You're hearing that from Amazon. you're hearing that from Microsoft and from META. So we're still deep in investment cycle, the AI investment cycle. And I don't know, Scott, whether it's two years or three years, and there's going to be a lot of infrastructure winners off this. And then eventually, I think these application companies will be the winners off of two. Yeah, Amazon, I mean, okay, I got alphabet, we got MET, I get it. But Amazon's your number one, right?

Of large cap longs for this year. why does it take the top spot? Well, it's still somewhat dislocated. It was more dislocated at the beginning of the year, but it's still somewhat dislocated. This thing is trading at 25 times earnings roughly. And, you know, I could look at kind of utilities like a Costco and a Walmart that are close to 40 times earnings. And I think, you know, here's a consumer and a tech utility. Secondly, I think you've got an inflection point in fundamentals.

And, you know, sometimes I put my momentum hat on. You're telling me I got an inflection, i.e. revenue growth is going to accelerate. margin's going to expand. How do I buy more stock? I don't want to overstate it, but there's something to that. And you're seeing acceleration, not just in the retail business, but in the AWS business, and the margins are going up higher in both of these segments, too. So I just like the fundamental setup. And then there's finally, there's my, I got my narrative pitch on the stock, which is, you want a great playoff for robotics. There's Amazon, and people have wondered how they're going to make money off of it. They just announced early in May, ASCS, Amazon supply chain services,

which essentially is now going to take all those million plus robots that they have and make those services, the logistics that they provide, pickpacking and shipping, inventory, air freight, etc., etc. They're going to make that available to all merchants, whether or not they sell on Amazon. It's kind of like they're creating all that digital infrastructure, the excess digital infrastructure 15 years ago turned into AWS. Well, now they're taking all that excess physical infrastructure

and then turning it into ASCS. It's kind of harder to pronounce, but I think that's really getting interesting new opportunity. So I just like the theme here, the fundamental inflection point, and I think I like the valuation setup. That's why Amazon's our top pick. All right. We'll see you soon. Mark, thank you very much for your time. That's Mark Mahaney, Evercore ISI.

Coming up, Trivariates Adam Parker, invest goes Brian Levitt. They are standing by. Stocks are moving lower today into the closed down by 500. We are back right after this. I think we all should worry to some extent that it's a narrow. singular bet that's being made and that's driving asset prices. I have a hard time disagreeing that that's something that's worthy of concern. But I do tend to go back to, are the microeconomics attractive? And are we doing something that is fundamentally creating enormous value in the

economy? And I think that at the moment, evidence points the fact that we are. That was Goldman Sachs president and chief operating officer John Waldron a little earlier in the program today on the state of the markets, the tech. trade and where we might be in the cycle. Well, to react, Adam Parker, Trivariates, founder and CEO, also a CNBC contributor along with Brian Levitt, Investco's chief global market strategist. It's good to have you both with us. I want to react to what Waldron said. I mean, yes, narrow, but so fundamentally game-changing for the economy, society, that it's not so crazy what we're witnessing in the markets in some respects. Yeah, I really agree fully with that view. I mean,

we did some work. Only 9% of the top 3,000 U.S. equities are currently generating meaningful AI revenue. Only 18% are saying they're doing things on the productivity side. So the bull case is just so much more of that still in front of us. And yeah, maybe asset prices are ahead of the fundamentals, but there could be a long runway in the fundamentals. So I think it's very early to say, this is a bubble, let's retreat. I don't think that's the best way to maximize returns. And the narrow return is really a tale of two markets. I mean, the first couple of months was a very different story than since the war in Iran started when we shifted.

If you look year-to-date, small caps, MSCI emerging markets are up pretty substantially. So, yeah, we've been far narrower what you would expect in an environment where things are slowing and the Fed may not raise interest rates. But, yeah, I'm with Adam. I don't think this is a bubble. I think there's certainly room to go on this. What does it mean, though, for where you think we go from here? Like, asset prices are up a lot.

Individual asset prices, in some cases, are up a whole lot, which is really what people are focused on, right? They look at the price action, and they try and make an analog back to 99. But as John Waldron pointed out, different earnings story today, different valuation story today. And that's the differentiator. Yeah, we talked about a couple weeks ago with Micron. I think I told you, P. Cotor is a buck 25. People said pay four times that's $5.20. The math on valuation in 2000 was way different. I think the answer to your question is, look, most of my clients that are long-only trying to beat an index are struggling because of anomalies in the index.

Like I was just looking at the Russell 1,000 value universe of your value PM. We tag stocks as growth, neither in value. Right now, none of the top 10 stocks are value. and there's more growth market cap than value in the Russell 1000 value because it includes Micron, Intel, and other things. So these guys are just not geared toward thinking about an index. You know, they've been doing this for 20 years and it's just a different game. So I think a lot of the challenge, and I could pick that apart in every mid-cap growth, is Sandesk. So it's just so hard to beat the index.

Like Marvell's not even in the S&P, right? Right, right. I guess Jensen says it's worth a trillion. It goes up 30% in one day, right? So I think that kind of stuff is really hard for people who are. I pick 30, 40 names with real research, and I hold them. And so it's a lot more of a risk management portfolio construction market than ever. The hardest question I think today for investors is, for what you sort of alluded to, Brian,

the way we started the year, you're thinking you're going to have this big broad, maybe in everything rally. Then it gets super narrow with the war. So what happens if the war ends? Like what happens if one of these social media posts actually ends up being the case that the war is over? There is an agreement. Does money sort of rush out? Do we use the SpaceX IPO and some of the others to remove money from the biggest parts of the market and put it more in disparate places?

I think you'll have some catch-up in other parts of the market. And what you're already seeing, if you look at where geopolitical risk is, yeah, I mean, we're still dealing with things. But it has come down from its peak. Oil prices are down from the peak. Interest rates, inflation expectations. So you do have an improving macro backdrop. better than where we were. If you get good news on that, then yeah, I think there's parts of the market, particularly those that were doing well early in the year, that'll move pretty quickly.

It's a pretty big bet to not own growth stocks in your portfolio, right? So this is about diversifying into other parts of the market as well. Guys, I got to bounce. We've been, we had a lot going on early in the program, Adam, Brian. I appreciate it very much. Thank you. Up next, NBA finals, they tip off tonight. The big money behind the Nixon Spurs coming up. The bell's back after this. Just to get in the door for game three of the NBA finals at Madison Square Garden next Monday night,

game one tips off tonight down in San Antonio. CNBC sports reporter Alex Sherman joins us now on the big money behind the series. I was looking earlier. I mean, you can get in the door tonight for like 7 or 800, but 5 Gs to get in at MSG. And you're just, talking about the cheapest ticket, Scott. In fact, let's start with ticket prices. If you take a look at

the average value of both games 1 and 2 in San Antonio and then games 3 and 4 in New York, believe it or not, both of these averages are record highs for the average price of the first two games and games 3 and 4 that we've ever seen before. In other words, the Knicks number there, which is $6,5,6,513. That is three and a half times higher than what we've ever seen before for the first two home games in any playoffs. Even that San Antonio number at Frost Bank Center of about $2,500. Even that would be a record over 2004's Dallas Mavericks versus Boston Celtics finals.

So that's what we're talking about here. If you do kind of a tail of the tape of these two teams, really these teams are like polar, opposites. I mean, the Knicks have a valuation of over $10 billion. They have the second highest team spend. And they haven't won a championship, of course, since 1973. Then you look at the Spurs. The Spurs valuation is $4.3 billion, a much smaller media market. They're number 22 in team spend. And they've had a sort of a consistent string of winning, dating all the way back to the late 90s, the David Robinson years, through the Tim Duncan years, through the Kauai Leonard years. And now here we are back,

led by Victor Wemnon Yama, and they're winning again. So it's almost sort of the, you know, choose your poison here. Are you rooting for the big market severe underdog or the small market team that has kind of gotten by on a little bit of luck and a lot of good management? I mean, it's incredible when you think about as you go down the list of, you know, how good the spurs have done over the years. the lottery for this franchise, I think more so than in any other sport for any other team, has led to such unprecedented success. It sure has. I mean, and look, they've built up a fairly solid fan base.

Of course, it probably doesn't compare to the fan base that we're seeing in the Knicks, which is why those values, of course, are so stratosphericly different. There's this pent-up angst in the Knicks fan base. In fact, I spoke to a New York Knicks fan just yesterday. Eli Manning, listen to what Eli said about the Knicks making the finals. I personally, I want it for the players. I want them to experience New York City and winning a championship and the excitement. And so just wishing for them to play their best and to bring this championship home.

So Eli has become a Knicks fan. You know, you may see him courtside. It is very difficult, of course, to get him. one of those courtside tickets. You can hear the full Eli Manning interview tomorrow wherever you get your podcast and also on CNBC.com. He's got the resources and the connections, so I'm sure he'll figure something out. Alex, thank you. We'll see you soon.

Alex Sherman. Up next, we track the biggest movers as we head into the close. Christina Parts of Nevelos is standing by with that. Tell us what you see. Well, we have oil higher on a Ron Strike comments, a video game retailer surging on a revenue beat and $2 billion buyback, as well as I should say a retail, a beauty retailer sliding on disappointing guidance. We'll have all of those details right after this break. Almost 10 to go before the closing bell.

Back to Christina now for the stocks that she is watching. Hi. Hi. Well, oil prices are rising following Israeli Prime Minister Benjamin Netanyahu's interview with CNBC Star and Eisen. Netanyahu is saying that Israel and the U.S. are ready to attack Iran if necessary. And to your question, Scott, oil names like ExxonMobil, Chevron, Conoco Phillips, all moving higher on those comments.

Switching gears completely. Shares of GameStop are popping roughly about almost 7% right now after posting a 14% rise in quarterly revenue and a $2 billion stock buyback authorization. The entertainment retailer says sales growth was driven by collectibles. And Ulta moving in the other direction down about 5% after it updated its fiscal 2026 guidance and it came in right around Wall Street estimates. Morgan Stanley did lower their price target on the stock analysts over there

just are worried about performance in the same. second half of the fiscal year. And they're worried that it won't deliver as expected because of that updated guidance. Scott. All right. I'll see in the zone just a little bit. Christina, thank you. Coming up next, you're speaking of your overtime setup, Broadcom and CrowdStrike reporting

top of the hour. We'll see in the zone next. On the closing bell market zone, Mike Santoli and Truist Keith Lerner here to break down these crucial moments of the trading day. Oliver Renick standing by live from Cebo and Chicago. Christina Partsenevalov setting up for Broadcom results. Sima Modi is watching crowd strike ahead of those earnings in OT. It's going to be very busy overtime.

Michael, we start with you as we headed the close down more than 500 geopolitics ruling the day to day. Yeah, two degrees, sky. A little bit of counter trend action. Obviously, oil up, yields firmer. Also got some pretty good economic data this morning that might be helping in that area. But yeah, so value over growth, low volatility over high beta. This is a one-day blip at this point, and you can't seemingly get rid of this semiconductor bid. But outside of that, market seems to want a little bit of a rest.

Not too concerned in the absolute sense that somehow it's been too narrow. Sometimes that just sort of fixes itself. Sometimes it's associated with a more serious peak. But, you know, we're up 11% year to date, 20% off the lows. So I think it makes sense that we're just going to kind of sputter here a little bit. How do you deal with things in overtime? It's going to be really interesting. You guys are set up well.

You got broad calm and crowd strike. I mean, two areas that are really. have been hot for sure, cyber and chips. On a given day, there's been a five percentage point spread between software and chips, and that's radically kind of unusual, let's just say that. We got Stacey Rask on our friend to break down the broadcom numbers, for one thing. So we're going to dive into that pretty well and have Lizanne Sanders from Schrad talk about the field position for the overall market.

All right, good stuff. We'll look for you in Mel, top of the hour. That's going to be great. We'll see you then. Oliver, Sebo, what do you got? Scott, excitement for speech. SpaceX IPO is ramping and showing up in the options market. Trading volumes are jumping in wireless networking business Echo Star, ticker SATS,

which owns roughly 3% of SpaceX stock as part of a deal involving the sale of wireless spectrum to Starlink. Options volumes more than three times the daily average the past month, and about five times more calls are trading than puts, though we do see more calls selling than buying as the stock slows down. a bit after a 650% run the past year. Still, at least one bullish trader stepped out and picked up just shy of 1,135 strike calls that expired June 18th, looking for a 16% move to above the $140 level, which, by the way, does seem to be a key target in this name, judging by the most popular contracts by dollar amount and volume at that $140, Scott. All right, good stuff, Oliver.

Thank you. It's Oliver at Cibo. To Christina and now and Broadcom really important earnings report coming up. Yeah, especially when the semiconductor sector is up roughly 100% this year. Broadcom, one of the best AI chip stories in the market, is really just up on about 40, not even 40% right now. Marbell up 260, Intel over 200. And investors have essentially just been selling mega-cap names like Broadcom, like Nvidia, to fund these faster-moving plays.

And Broadcom has just really been caught up in that rotation. So today's earnings is a chance to maybe change that narrative. The company needs to deliver on two major things. A credible update on the Anthropic deal, which has already been restructured and carries a much lower near-term revenue number than originally expected. And then, of course, concrete numbers around 2027 the year. The entire growth thesis hinges on the company has targeted more than $100 billion in AI chip revenue that year. A number some analysts say could go significantly higher, Scott. All right, Christina, thank you very much for that.

All right, Seema Crowdstrikes had an incredible move over the last month. And here come the earnings. It has got. And CrowdStrike earnings come just as its direct competitor, Paula Alto Networks, is witnessing its shares moving lower, despite a Q3 beat and raise with concerns around Mythos. Only Rising Wall Street will be keen to hear how quickly Crowdstrike is able to sign on new customers to its Falcon Flex security platform,

the competitive backdrop and the latest updates with Anthropics Project Glasswing, which Crowdstrike is a member of. The challenge is expectations are high, which shares up roughly 60% year-to-date ahead. of tonight's report. So bar is high, Scott. All right, good stuff. Seema, thanks. We'll see what happens there. Keith Lerner to you. I guess the takeaway of this market seems to be narrow, but okay for now. Is that how you see it? Yeah, I think so, Scott. I mean, you know, first of all just say, you know, we all talked about

this nine-week winning streak last week. And when we looked at the stats following nine-week winning streaks, the next week you were down seven out of nine, seven out of ten times. So what we're seeing this week is somewhat normal. I think importantly, at time, frames matter. And when we look at over the next year, still based on that same study, markets have been up eight out of ten times. But listen, we're up, as you said, 20% for the S&P off the lows. The technology sector is up 40%. And I just looked, the tech sector is now about 25% above its two-day moving average. That's the most since October of last year. So I just think we're due for a rest, Scott. We've come a long way. Fundamentals are solid. Bull market still deserves a benefit of the

doubt. But often markets are two steps forward, one step back. We've had three steps forward, so maybe at least the mini step back or at least some sideways chop. If you do get the step back, do you get money rotating anywhere or you just get the dip in tech bond if in fact it does dip? Yeah, I think ultimately money will come back to tech, but in the interim, I do think you can see a little bit of rotation. The one area that we like outside of tech right now is still energy. Energy has given up all its relative gains this year and now it's bouncing today. We still think it's relatively cheap. It's a good hedge.

And as a barbell, we still like that alongside tech. What don't you like? Well, Scott, you know, it's just, again, I think just how quickly we've moved up. And listen, the narrow market's okay because it is, you know, AI driven. I think one thing we just downgraded this week is international developed markets. There, we're seeing weakening economic trends. We're seeing relative price trends and earning trends deteriorate. So that's something that we just downgraded more recently.

And all in all, I think, I mean, it is concentrated, so I'd like to see other areas of leadership step up, and we're just not seeing it at this point. Yeah, no, we really have it. The question is, though, does the end of the war initiate a move elsewhere? Are you thinking about that? Yeah, on the margin, I think money will rotate somewhat to some of these being up areas, but I don't think it's leadership. You know, we often talk with you, Scott, really for the last couple of years,

that every bull market has a dominant theme, and that dominant theme, which in this case is AI, the relative price performance tends to lead towards the end. So if your premises, the bull market's intact, which hours is, while there might be some short-term mean reversion trades, ultimately, as we think about the next year, 18 months, we still want to be focused on tech and tech-adjacent sectors. Talk to you soon. Keith, thanks, Keith Lerner, the truest.

They're about to ring the bell. It's going to ring out a red day, though. There's no doubt about that. 565. It's still certainly.