Closing Bell - Is CoreWeave The New Meme Stock? & How To Trade U.S. Trade Stalemate 6/4/25

Episode Date: June 4, 2025

Bond yields fall after softer ADP employment data, setting the stage for Friday’s jobs report. Our Rick Santelli breaks down the move, with Mike Santoli offering his take on what it means for markets. Adam Crisafulli of Vital Knowledge weighs in on jobs, the Fed, and the rate outlook. Earnings from Five Below, PVH, and MongoDB take center stage. Marko Papic of BCA Research discusses the implications of an expected Trump-Xi call on U.S.-China trade. Jim Paulsen joins to discuss the wave of strategists lifting their S&P 500 targets. Brent Thill of Jefferies and Gil Luria of DA Davidson go head-to-head in a CoreWeave valuation debate. 

That bell marks the end of regulation. Oshkosh ringing the closing bell for New York Stock Exchange. Waystar doing the honors at the NASDAQ. And stocks trading in a tight range today, ending the day with the gains. S&P up nearly 20% from the April 8th lows. Energy and utilities were your laggards. Communication services and real estate leave.

Bond yields moving lower today on the back of some weak economic data. The 10-year hitting its lowest level since May 9th. More on that ahead. And that moves implications for lower mortgage rates, sending the home builders higher. Meanwhile, Dollar Tree seeing steep losses as tariffs loom. That company saying earnings per share could see a pullback of as much as 50% in the current quarter from those levies.

Tesla lower following weak sales data in China and Germany and some big moves among the chips on Semi, the top performer in the S&P rallying big for a second day. NXP, Marvell and Taiwan Semi are other winners and some stocks hitting all time highs, Netflix, Visa, Axon Enterprises, Seagate and Broadcom. That is the scorecard on Wall Street. Welcome to Closing Bell Overtime where winners stay late. I'm John Ford. Morgan Brennan is off today coming up We are expecting earnings from MongoDB a couple retailers also reporting PVH and five below five below has been a proxy for Chinatown

So watch what that company has to say and we're gonna bring you those reports as soon as we get them Let's start though on today's big drop in yields as markets reacted to some weak economic data Could it signal that worry about the economy and Friday's jobs report is in the mix? We're gonna do some Santelli then some Santoli, but first let's bring in Rick Santelli at the CME Rick You know John it's very interesting because today Fed fund futures the December contract that's we're gonna focus on well It rallied as you see on this intraday chart which implies a Bit more easing how much well consider this right now It's an implied yield at that December meaning of 377 3.77 percent yesterday and implied

3.83 percent so it moved basically six basis points, okay? What does that mean that means we move from basically two cuts to two and a quarter Cuts and those cuts are 25 basis points apiece Now if you put the chart up and you put it year-to-date for the Fed funds December Contract a couple of things jump out at you the fact that it's turning on the right side as it starts to move up it's putting more easing back in. At the high water mark John, see kind of in the middle of that chart April that was April 8th at that point right now we're two plus cuts at that point we had four quarter point cuts built in for over one full percent a hundred basis points of easing so

we're going back in that direction. Finally, the markets today gave us a lot of info. Look at a two-year intraday. Those big drops you see, they were at 815 on the two-year lowest 37,000 ADP jobs, and then at 10 o'clock when we saw the weaker than expected ISMs. But it was a mixed bag. The ISMs before that from S&P Global actually Improved and I agree that Friday's jobs jobs jobs number could change the

landscape on both the Fed and interest rates But before everybody's looking for slowing consider Joltz yesterday added 191,000 jobs and Atlanta Fed on their 1,091,000 jobs and Atlanta Fed on their forecast for GDP is looking for 4.64% You know what it was a month ago 2.20% it's more than doubled so there's still some data on both sides of the weakening versus how much it's weakening Economic equation John back to you one more trading dates. We find out if those jobs are getting filled, Rick, thank you. So, how did investors digest today's move in bonds? Let's bring in senior markets commentator Mike Santoli.

Mike? Yeah, John, pretty much took it in stride. I mean, on one level, it's like be careful what you wish for, right? Some people were concerned about bond yields going too high for equity markets to really be comfortable with. Well, now they've kind of unwound to the downside a little bit because we have this little soft patch and data. The economic surprise index has rolled over in a negative direction that just says

numbers are coming in worse than forecast, but I don't think it's a game changer. I also don't think that yields were up where they were specifically because it was some kind of a panic about the federal fiscal situation that definitely was an overhang it's definitely a psychological element of it but if that was a piece of it maybe it's not as bad today who knows if this billion Congress gets through people they didn't count tariff revenue against it maybe that makes the deficit seem a little bit less scary overall I do think it's kind of just coiling up the market in advance of the jobs report.

The momentum in stocks has been pretty good, but it's sort of slowed and it's been much more of a grind than a burst higher. And so today it more or less stopped the S&P 500 in its tracks. All right. Thanks, Michael. See you in just a little bit. Let's bring in now our first guest, who's bullish on bonds given potential growth headwinds. Joining us now, vital knowledge founder, Adam Chrisafouli.

Adam, it's been quite a run that the S&P has had, a lot of stocks in general over the past almost exactly two months ahead of this Friday jobs report. Is the market perhaps looking for an excuse to sell off? How good do you think this report has to be? Yeah, I definitely think there's a lot of complacency in the market on a variety of fronts including on the economy on tariffs on You know on a host of different issues and valuations leave very little room for error You know, so I think stocks are generally unappealing at these levels, you know given you know It should be said though that earnings have been very strong

You know up until the ones that we saw last night and this morning. But for bonds, you did have four negative data points down in the last two days with the ISM ADP today. The Beige Book also talked about weakening growth momentum. And then you had auto sales yesterday for the month of May were down sharply on a sequential basis. So I think investors now expectation for the Friday jobs that's certainly taken a little bit of a spill.

You know, there hasn't been a very strong correlation between ADP and BLS lately, but there does seem to have been a down-take in momentum. And then on the fiscal front today, you got a little bit of positive news on a relative basis where the final CBO score for the reconciliation bill wasn't as bleak as it had been in the preliminary estimate. And there was a separate CBO analysis that took into account tariffs. And if you combine both of them,

you're actually looking at a net 400 billion benefit to the deficit over the course of 10 years. Obviously, there's a ton of caveats. But all those factors are good for treasuries. Hold that thought, we've got some earnings out first. MongoDB, Julia Borsten has those numbers, Julia. John, MongoDB, beating expectations in the top and bottom line with adjusted earnings of a dollar per share beating estimates of 66 cents per share revenues of 549 million ahead of estimates of

528 million dollars the company is also increasing its share repurchase program by an additional 800 million dollars bringing its total buyback share repurchase program by an additional $800 million, bringing its total buyback authorization to $1 billion. Now in terms of guidance, the company's guidance is ahead of expectations. That's why we see shares up about 12% in after hours trading. The company guiding to Q2 revenue, 548 to 553 million. That is ahead of the estimate of 550 million,

but it's the earnings guidance that's so well ahead of expectations. The company guiding to adjusted Q2 earnings in a range of 62 to 66 cents, that range well ahead of the 59 cent per share estimate. Shares now up 12.5%. John back over to you. Strong move, Julia. Thanks.

MongoDB CEO David Aceri is going to break down those results in an exclusive interview tomorrow right here on overtime. And now five below results are out as well that stock heading in the other direction I believe Courtney Reagan has the numbers court yeah hi John and I believe that's because of the guidance but let's tell you about the quarter that the company just reported five below reporting earnings per share of 86 cents that's a beat of four cents the street was looking for that metric to come in at 82 cents revenues also stronger than expected for the company's quarter at 971 million. The

street was looking for 967 million. When you're looking at the second quarter adjusted earnings, it gives a pretty wide range here. They're looking for earnings to come in between 50 and 62 cents, but that brackets the street expectations at 56 cents. The second quarter revenues are in a range that is stronger than what the street is looking for between 975 million and 995 million the street only expecting that metric to be 958 million. But when you look at the full year guidance, that's what I think is dragging down the stock. They are looking at the adjusted full year guidance range for earnings to be 425 to 472. The street has been looking for that to be 476. Revenues also, potentially I'll say that that brackets expectations, but certainly doesn't blow it out of the water like the second quarter earnings do.

Also, we do want to note that the current CFO, Christy Chipman, is stepping down and the current COO, Ken Bull, is stepping in to take over that role until a permanent replacement is found. But five below shares are down about 2% here in the after hours, John. All right, Court, thank you. Adam Chrisafulli, back to you. We talked about Five Below being a bit of a barometer on tariff impacts.

We could talk about some of the dollar stores there as well as we did earlier in the show. It raises the issue of stagflation. And we got the president saying, hey, Powell, you're behind on this, you need to cut. But the beige book seemed to suggest businesses are cautious about adding costs, adding people in part because of the uncertainty around tariffs,

but then we're also looking at costs going higher because of the certainty around tariffs. How do those two things net out for investors, you think, at this point? Yeah, I mean, I think that really is kind of the biggest dilemma facing the entire market right now. You saw it in the ISM as well, where the growth components have weakened sequentially,

and you had another increase in the price index to a very elevated level, and the Beige Book kind of qualitatively echoed that. So, you know, this is the Fed's messaging for the last couple of months, where they see risks to both sides of the mandate, risks of higher unemployment, risks of higher inflation, and they're really waiting to kind of just see where things settle out. You know, Waller gave a speech earlier in the week where he kind of put a, you know,

the 10% number on all-in tariffs is kind of, I think, the demarcation point. Anything above that, you start to see a more pronounced impact to the economy, and we really just don't know at this point where things are gonna settle out. We still, you know, they're holding trade negotiations. We're about a month out from that 90-day reciprocal tariff expiration deadline,

and we're just gonna have to wait and see where those tariffs settle out, but definitely, speculationary pressures are showing up in a lot of the data. All right, Adam Kousseffouli, thank you. Now we got a news alert on Uber. Diandrovosa has those details. Di?

Hey John, so here's the alert. Nikesh Arora, the CEO of Palo Alto Networks, he is joining Uber's board of directors that was just announced in a regulatory filing. Now this comes amid a broader executive shakeup this week which promoted Andrew McDonald, that's the current head of mobility to president and COO, allowing CEO Darakaz Arshahi to take on more of a strategic role.

The timing and selection of Nikesh Arora, that is interesting because he was a top executive at Google during the formative years of its self-driving project now known as Waymo. He understands Google's culture, its long-term bets, and especially how Waymo fits within Alphabet's strategy. It also comes at a time when Uber and Waymo are still figuring out their RoboTaxi strategies. Waymo is partnering with Uber in two markets, but it also owns the rideshare platform itself

in places like San Francisco and LA, raising the question, how far will that partnership go and could Waymo ultimately become more of a competitor than a partner? Aurora also, along with his experience at Google, has experience at SoftBank. He was there from 2014 to 2016 as it invested in autonomous tech broadly. And all of that could give Uber a more strategic lens into the robo robotaxi dynamic just as Tesla rolls out its own fleet going it alone. Yeah, Aurora knows a lot of people a lot of stuff. Dee, thank you. Well the S&P 500 getting within a few points of 6,000 today recovering almost all the trade turmoil

losses and now flat for President Trump's second term but our tensions about to flare up again. President Trump calling Xi, the Chinese president, very tough and hard to make a deal with. This, as talks between the two, are expected to take place soon. So what can we expect from those negotiations? That's up next on Overtime.

["The Daily Show"] ["The Daily Show"] ["The Daily Show"] ["The Daily Show"] Welcome back to Overtime. Shares of CrowdStrike lower following its earnings report last night. Bank of America downgrading the stock to neutral saying there's limited upside and more risk to growth. Evercore and Canaccord also downgrading following earnings. The company is saying today it received requests from both the Department of Justice and the SEC

related to the Windows crash last July. Meantime, several key developments on the trade front, President Trump saying Chinese leader is extremely hard to make a deal with in a true social post. This as the two leaders are perhaps, perhaps set for a call this week to discuss trade. Today, the administration trade officials call this week to discuss trade. Today the administration trade officials are pushing countries to submit their best offers

according to a report from Reuters. Despite the tension, several high profile Chinese tech names posting a strong session today including Alibaba, JD, Temu Order, owner PDD, and Baidu. And joining me now is Marco Papich, BCA research chief strategist. Marco, good to see you again. So the president has worked to project strength here and say countries are lining up to make deals, but so far outside of the UK, we haven't seen much. How are international markets reacting here and how does China factor in?

Well, I mean, international markets have absolutely crushed performance since January. There's been a little bit of ebbing of performance over the last several weeks, and I think that's to be expected. And I think that there will be turbulence. Not all countries are going to line up and be successful. I think that myself and pretty much every commentator out there is guessing that Europe is likely to bear the brunt of President Trump's ire in terms of slow walking and negotiations. Then there's others where there appears to be real positive momentum, like India.

You know, Secretary Lutnick actually made some pretty positive comments on India the last couple of days. So it's a mixed bag. And I think investors should expect more volatility over the next several weeks. At the same time, we've seen President Trump already decide to delay onerous tax, to delay very harsh tactics, and I think that will continue.

It looks to me like Europe is caught a bit between a rock and a hard place in the sense that they've got a rare earths problem with China at the same time. China very much doesn't want President Trump to successfully isolate China, which would, I guess, of course, involve the EU. So how do they do that dance, dealing with the rare earths issue in China while also not making things worse with President Trump? Well, actually, the danger there is not to Europe. In fact, there is a huge

Benefits to China if it were actually to take it easy on European car manufacturers and punish and isolate American ones So that story has not been written yet. You know, we got to see where the US China negotiations go Ultimately, I think the fact that we went down from triple digit tariffs down to single to double digit back to 30% level, I think that indicates effectively that the US does not really have a pain tolerance for a prolonged trade war. And when I say the US, I mean the administration, I mean corporates, I mean, voters, households. Whereas the risk to President Trump is that China has proven over the past five years

that their pain tolerance is much higher. I mean, let's not forget the zero COVID policy that Beijing imposed on the country, probably 18 months too long. And so there's not really any evidence to to me at least, that in a confrontation over trade and economic pain, the US can actually win. OK. Well, why are you recommending that investors buy European telcos? Well, I think that's one of the ways to sort of hide through this turbulence.

European telcos are completely domestically oriented. They're not trying to sell really anything to the US. There's no real trade here. Some European telcos own American operators, but that's a different kind of a relationship. So the reason that they're interesting is that they're defensive in nature. They're not exposed to globalization and Europe as a result of very aggressive US tactics and Chinese industrial overproduction, Europe is actually starting to finally take structural reforms in its single market seriously. And so Telcos could be a huge beneficiary of this. Interesting. Marco Papich, always good to talk to you. Okay, PVH earnings are out. Courtney Reagan back with those. Court? Hi, Jen. Yeah, so for

the first quarter, PVH is beating the Street for the expectations on both earnings and revenue reporting. A 230 adjusted. The Street was looking for 225 on revenues of 1.98 billion compared to 1.94 billion. It's a gross margin coming in though, a little disappointing at fifty eight point six percent. The street was looking for fifty nine point three percent. If you're looking at it by revenues year over years direct to consumer down three percent wholesale up six percent. Tommy Hilfiger the leader of the brands of three percent while Calvin Klein was flat. It's the guidance that is pulling

down shares here of right now to the tune of about was flat. It's the guidance that is pulling down shares here of right now to the tune of about 2%. It's mixed guidance. The company thinks that for the second quarter revenue, they're reaffirming, which is slightly above the street of flat to increase slightly. That is for the full year revenue, excuse me. The second quarter revenue is projected

to increase low single digits compared to the second quarter that is also above the street but when you look at the earnings range that they are giving for non-GAAP they're getting very specific about the impact actually of unmitigated tariffs and they are saying for the second quarter it equals 20 cents per share on mitigated tariffs and so they are expecting a range of $185 to $2. That is below the street's expectations. And for the full year, they are expecting a $1.05 value basically of tariffs that would be unmitigated. And so that value is an expectation for full year earnings to be between $10.75 and $11. That is also below the street's expectations by a decent margin. So sort of a lot of detail here given about what they think

they can mitigate and what they think they can't as they note significant uncertainty. All right, Court, thank you. PVH down a bit here in overtime. Let's get a check on VARINT system, which is up a lot. That stock jumping on its results, beating on earnings and revenue, full year guidance, slightly above expectations.

The company expects AI, annual recurring revenue, to grow by more than 40, 20%. Sorry, it's up 14 and a half percent right now in overtime. Coming up, shares of CoreWeave soaring 44% so far this week. It signed a big deal. But is this move really just about momentum? We will debate. CoreWeave, not the only thing breaking out. Mike Santoli is going to join us again with a look at the outperformance of the global

markets. Be right back. Welcome back to Overtime. Shares of Reddit jumping 7% today. The social media company Suing Anthropic saying the AI firm uses Reddit data without paying for it. Anthropic is, quote, intentionally trained on the personal data of Reddit users,

the company says, without their consent. Now let's bring back Senior Markets commentator Mike Santoli looking at the breakout we've seen, we were just talking about with Marco in global markets Mike. Yeah John so you know the world's never been better at least measured by the all-country world index this is the global equity benchmark a pretty clean breakout it was you know just above where we had peaked earlier now this is what the S&P 500 itself still about 3% below its all time high.

So obviously outperformance by the rest of the world. We can see that here in the all country world index excluding the US relative to the S&P. Now this is still showing this is a two year chart that the S&P 500 has still a pretty decent lead over this stretch of time. But look at how the gap has closed. That's basically the outperformance of the rest of the world. Now, if you go back even farther, U.S. outperformance is massive.

I wouldn't make too much of the idea, though, that it has to really come together or have a sustained period of the rest of the world outperforming the U.S., simply because very, very different measures. The MAG-7-type stocks within the S&P 500 almost give it a different profile of company. It's much growthier, all the rest of it.

But for now, diversification has helped. Take a look at the U.S. dollar index. It was weak again today. It's essentially lost what had been a two- to three-year range right here. That big surge there was around the Iraq, the Ukraine invasion. But you see, U.S. investors do better

with overseas investments, but it also means the rest of the Ukraine invasion. But you see US investors do better with overseas investments, but it also means the rest of the world might be growing faster relative to the US than it was before, John. Mike, how similar is the S&P equal weight to the S&P in general, to the all country world index ex US compared to the S&P?

I sort of wonder the impact of the MAG-7 there. It's closer. I would say that it actually has been a really good match for the rest of the world. The Equalweight S&P has up until just recently. And then the rest of the world actually started to jump ahead of that too. It's mostly because of things like European banks,

Japanese banks that have just had these massive moves to the upside. But it actually, there you go, you can see how the all country world index has kind of made that jump a little bit just recently. But before that, it was a pretty tight fit. Wonderful. Charts on demand. Love it. That's great.

Mike, see you in just a bit. S&P 500 higher again today for the third straight day. Getting back to those levels we haven't seen since the end of February, but bond yields falling on weak ADP data. What's that telling us about the direction of the economy? We will dissect that next. ["The Daily Show"]

["The Daily Show"] Welcome back to Overtime. Let's get a check on the market. Stocks mixed with fractional gains for the S&P and NASDAQ, which hit its highest level since February 24th. The big moves were in bonds, yields falling as the ADP payroll hit its lowest level in more than two years. This afternoon, we got the beige book showing signs of contraction over the past six weeks. MetaHire today, it's reportedly working

with Hollywood Studios to fund exclusive content for its VR headset, also getting a price target increase at JP Morgan to $735 a share, since the stock zoomed past the firm's old price target. And let's check some of the overtime movers. Software names, MongoDB and Varent, both up more than 10%. And the retail names are split,

PVH lower, five below higher. Space company Planet Labs higher after a break even quarter where a loss was expected. Now we've been talking about the S&P having seen the sharp rebound from April lows, now up nearly 20%. My next guest sees that rally continuing with the index rising to new highs in the second half of the year.

Joining us now is Jim Paulson, author of Paulson Perspectives. Jim, there's a lot that has to happen between what Congress is going to do and what these tariff deadlines hold. Why are you optimistic? Well, I think, John, that there's a lot of unpoled levers that could really be positive yet for the stock market, even though this bull is now, what, 31 months old or whatever, there's a lot of things that we traditionally have used that we haven't yet used,

and they're pretty much tied, I think, to Fed easing. Until last year, when the Fed eased for three months, this was the only bull market, which began in October of 2022, in post-war history that didn't have a period of Fed easing. Usually bulls start that way, we didn't get it. And that's why I think we've had a very narrow, concentrated market bull rather than a broad one.

The three months that the Fed eased, John, the market went up 10%. It was good. But I think they're gonna have to ease again. I think the economy's slowing down and it could be Friday that tips the bucket if payroll's really weak or it could take a couple more months.

But I think the Fed's gonna have to ease. And if they do, they open up a lot of positive force for the economy, provided we don't recess But doesn't it depend Jim on the reason why the feds easing and we're sort of in this I'm not gonna call it stagflation because we're a ways from that but this stagflationary worry Right that growth is slowing down because of uncertainty and prices could be heading up because of tariffs if one of those things To the extreme forces the Fed's hand, might that not freak the market out? It could. I mean, you're right, John. If we truly get

tariff-related inflation in a big way and the Fed has to tighten into that, that's going to be very bad for the stock market. We'll probably return to those lows we saw earlier in the year. I don't think that's going to happen. I think the inflation story is overly exaggerated and they're gonna react, I think, to slow growth and be forced to ease. But if they do, it's gonna bring a lot of things we haven't had. You get lower short rates,

allow the bond yields to come down, allow some money growth to speed up, which has been paltry throughout this bull. It brings, it causes the yield curve to steepen, which has been paltry throughout this bull. It caused the yield curve to steepen, which we haven't had. Finally, maybe most importantly, I think it could finally raise confidence in this country if the Fed got behind this and supported the market and the economy and showed that they're not going to allow a recession.

I think confidence would rise. Boy, if you get rising confidence, just to give you that, if you look back to 1960, if I look at the confidence index every month, every month it's gone up versus the months it's gone down, this S&P has gone up 16% annualized in rising months versus a little over 1% in falling months. Well, Jim, for that confidence to happen, doesn't it all hinge on jobs?

And we've had some concerns about the consumer. But if jobs remain strong and the consumer can keep spending, but they've got to keep spending and jobs have to remain strong in the face of these AI questions and pressures and questions about whether overall growth, particularly in the second half, is going to slow down. Yeah, I think growth is going to slow down, John. I think we're already around 2% growth. I think we're going to duck under that in the last half, and that's going to bring

Fed ease, interest rate ease, if you will, money supply ease. And I think that that is we're going to get close to maybe 1.5% growth for the full year. But I think that that will allow expectations about the future to climb that the 2026 is going to be a better year for growth because we got monetary interest rate and fiscal support coming at it and probably the tariff thing will die down as well. And I think the market will be looking ahead to that. I don't think we're going to have recession and that is what ultimately will be the key if we avoid recession that I think the bull think this bull has a lot of legs left.

Okay. Let's hope it has all four. Jim Paulson, thank you. Up next, Mike Santoli breaks down the case for Broadcom replacing Tesla in the Magnificent 7, with Broadcom set to report tomorrow after the bell. And CoreWeave shares quadrupling since it came public in late March. We're going to debate whether it's too late to buy the stock that's also coming up on overtime. Broadcom hitting all time highs today as investors await earnings results tomorrow. Should the stock be counted among the magnificent seven? Let's bring back Mike Santoli. Mike.

Mike Santoli. Mike Santoli. all time highs today as investors await earnings results tomorrow. Should the stock be counted among the magnificent seven. Let's bring back Mike Santoli Mike. Yeah John there's no real committee that decides what's in the magnificent seven initially that whole rubric was sort of descriptive right there

with the seven stocks often the largest in the market that seem to be having an outsized contribution to the upside the last couple of years. But at least in size terms Broadcom has now eclipsed eclipsed tesla one of the magnificent seven in market

value this can obviously flip back and forth and actually at times Berkshire Hathaway has been larger than tesla for a while it's now about neck and neck but I think that there's a case to be made that just because of the kind of company

in the financials- that broadcom is that maybe it matches up more closely with the rest of them. Take a look at the PEs for one thing on a valuation basis. Tesla just kind of throws everything out. It's such an outlier to the upside because the estimates have been cut significantly and so much of the value is just kind of you know whatever being attributed to these ventures that are yet to come or to the mean value of the stock and then you have you know, whatever being attributed to these ventures that are yet to come or to the meme value of the stock. And then you have, you know, Broadcom,

it's around 35 times forward earnings. The Broad Nasdaq 100 is around 28-ish thereabouts. The Mag-7 as a whole is in that range as well. It just seems like the reason you're in the Mag-7 is because you have high profit margins, dominant market positions, things that seem like maybe it matches up more closely to Broadcom, but again, nobody decides these things, they just organically become what they are.

Maybe you could decide. I guess you could argue though that Broadcom is baby NVIDIA, maybe in the way that Meta used to be baby Google. Now it's challenging. 100%. You're not really diversifying away. You're not capturing some other themes fundamentally know, themes fundamentally that you would outside of Nvidia.

So, maybe there don't have to be seven, for one thing. We can, you know, remember Jim Cramer came up with Fang on his own. And by the way, the Fang Index also made a new high this week. Legendary. I guess nothing is threatening to join Netflix, though. That's the one that's kind of off on its own, right? Because it's much smaller, and that's the only reason the only reason really I mean it really otherwise would fit in terms of being one of these huge platform companies that you know has this kind of self-sustaining

fundamental momentum maybe app loving can uh can threaten that someday all right mike santoli thanks well core weave has been crushing it up 40 percent this week but is the stock running out of steam? A bold bear debate is next, and later the shift in the housing market that might be a sign of trouble for investors. And overtime comes right back. Welcome back to Overtime Court. We've stocked up more than 40 percent so far this week.

The company announcing a seven7 billion data center lease deal with Applied Digital. The company's first earnings report was about two weeks ago. Shares are up more than 150% since then. Core, we've also the number one searched ticker across CNBC Digital yesterday. 30% of shares outstanding are short according to S3 partners.

So is this massive move higher warranted or is this just the next meme stock? Joining me now is Gil Luria, head of technology research at DA Davidson and Brent Thill, tech research analyst at Jeffreys. Gil has an underperformed rating on CoreWeave. Brent has a buy, albeit at a much lower price target. Gil, CoreWeave reminds me of nothing more

than Supermicro five quarters ago, is that fair? Oh, it's a lot worse than that. This is somewhere between the meme stock like AMC and GameStop and Enron. It's really an off balance sheet arrangement from Nvidia. The value of the enterprise is owned almost entirely by the debt holders. This is one of the worst balance sheets

that technology companies ever had. The deals are designed so CoreWeave has enough revenue to pay off the debt over five years. So all the equity holders really own is what's left over after five years of the data center in terms of value. And if we believe Jensen Wong, he thinks that the chips become obsolete after two or three years. So these data centers may be fully depreciated before equity shareholders even get any of the value. Wow, that's a rough assessment. Brent, why is he wrong? If you look at OpenAI, Microsoft, the rest of the industry, they're going to Cordovae because they know how to build an AI data center better than anyone. I think many of the points are correct in terms of

the debt and some of the other pieces of the story. I think you have to look at the bigger story, which is where at the beginning of AI, the biggest AI companies in the planet cannot do this on their own, and they've all turned to Core Weave to build this infrastructure for them. And the fact that the most important AI company that we're all seeing is OpenAI, and they're effectively keep coming back to them for more deals, tells you how good CoreWeave's management team and the underlying architecture of what they're building out is, they're just on the right track.

Okay, Brent, I get that, but why is it worth $78 billion as opposed to, say, $35 billion? John, Palo Alto Networks' market cap is way higher than CoreWeave. They're like 10 other cybersecurity vendors. So if you look at this relative to others in the industry, I think this is a unique asset. Again, we're moving from the CPU cloud to the GPU cloud. And in five years, you look at the data that are in these clouds, it's not cloud data, it's not websites.

This is advanced AI data. So I think ultimately you look at the proxies. I mean, no one at the proxies. I mean no one thought Salesforce was worth this. No one thought Palantir was worth this. I get it, yeah. Okay, so Gil, back to you then. Why isn't this the Amazon, right, of AI data centers?

If you build it, it will come. There was a time when people were saying, oh well, Amazon's model's all wrong, eBay's better, they don't have to pay for this logistics infrastructure. It turned out being able to build e-commerce logistics infrastructure was a differentiator. Why is that not the CoreWeave AI infrastructure story? The only reason Microsoft uses CoreWeave is they didn't get enough chips from Nvidia. In Nvidia, instead of filling all the orders from Microsoft, Amazon, and

Google, they decided to create this new category of Neo Clouds to keep the heat on the hyperscalers. So Microsoft didn't get enough chips, CoreWeave got those chips, so Microsoft turned to CoreWeave for capacity. But Microsoft is a direct competitor. The only reason they're using CoreWeave is because they have the capacity right now. When the contract expires, by then Microsoft will have built out the capacity it needs. It won't need CoreWeave anymore. What cracks the stock then? The end of the lockup period from the IPO.

The stock right now has a very, very small flow, very high short interest. This is a spectacular short squeeze, just like the days of AMC and GameStop. And when we get to September and the lockup expires, everybody's free to sell shares, the cost of borrow will go down and with it the stock price. Brent, if that happens, is September a buying opportunity? I mean, it depends on the level it goes to. I mean, the stock's up 40% in this past week, so we don't disagree. The magnitude of the move may it goes to. I mean, stocks up 40% in this past week. So we don't disagree the magnitude of the move may be over exaggerated.

But again, I think you look back and look, you're talking to an analyst that was dead wrong and Palantir and it's gone straight up. Look at all these AI stories. When they went public, this was effectively the lowest moment. And now we've gone back to a new high in terms of AI excitement. So you

know perhaps we're a little overheated we've had a little bit of an overrun obviously the magnitude of the move just this week but I think this company is a longer lasting value than is being alluded to and the fact that the biggest companies including Metta and everyone else is turning to them it's not like they're gonna move their data and then rip it out and shut it off. That's not gonna happen. Okay, I just wanna point out that Palantir dig

was a dig on yourself, I believe, in case anybody was like, ooh, shots fired. You were actually- 100% that wrong. So I'm just saying- It's very nice, yeah. That's making the same mistake here, and that's why. And this is a win for you right now.

Gil, sometimes stocks do irrational things, right? And that's why. Right. And this is a win for you right now. Gil, sometimes stocks do irrational things, right? What are the chances that that's the case here with CoreWeave? So, John, first I appreciate you clarified that. We're staying away from shorting Palantir. It's a great company with a great mission with a very loyal following. The scenario where CoreWeave does okay, and this is a possible scenario, is where we have exponential growth of AI.

If we have exponential growth in the need for data centers and the large builders are never able to catch up, not even in three or five years, there will be a need for overflow to go into CoreWeave. But in that scenario, there's other better stocks to invest in. Nebius, ticker NBIS, is also a pure play AI data center with some other great properties without this crazy leverage with organic customers that are not competitors that can do a lot better than CoreWeave in that scenario,

which is again an extreme scenario. It's possible, but it's an extreme scenario, and that's the only scenario Corweave has any value to equity shareholders. A gentlemanly and nuanced bull bearer debate, Gil Luria, Brent Thill, thank you. Thanks. Well on the court, the basketball court,

Steph Curry has become one of the greatest shooters, well, the greatest shooter in NBA history. Off the court, he's building a business empire from media to bourbon. Tonight, CNBC takes you inside Curry Inc., including whether he has any flaws. That's a great question. It's like a job interview. It's like I worked too hard or I'm too honest. Right, right, right.

There's times like, the way I like to treat everybody the same and make sure that that's a part of, you know, a consistent part of how I do life. So I appreciate the fact that people have good reports on like when they have an interaction with me, how they feel after they talk to me or have have an interaction with me, how they feel after they talk to me or have a run in with me. But outside of that like we all like to be a better husband, a better father, like more present at times just because I'm pulled in a lot of different areas and balancing all that is a daily struggle or challenge I should say.

Balancing all that is a daily struggle or challenge, I should say. I'm human like everybody. You have doubts about yourself. You have imposter syndrome at times. You have an idea of... You still have imposter syndrome? At times, yeah. It's an idea of, are you doing everything you can to take care of people that are relying on you, or you fulfilling your full potential in all the different areas that I've set out to do.

Those are daily commitments and daily thoughts that you have to kind of weave through. Because there's a lot going on, and I'm blessed to do it all. Humility. Don't miss the premiere of Curry Inc., the business of Steph Curry. That's tonight, 9 p.m. Eastern and Pacific on CNBC.

And up next, why a red flag for real estate investors could be emerging in the rental market, when overtime comes right back. A shift in the housing market. Good for renters, not so much for investors. Diana Olick joins me with the latest. Diana. Well, John, apartment rent growth is suddenly slowing at a time when it usually ramps up. Rents in May grew by just 0.4% from April,

less than in May of last year and the year before. So now rents are 0.5% lower than May of last year. This after they had been moving closer to positive territory over the last six months. All this according to Apartment List. Well, why? Because vacancies are on the rise, again, hitting 7% in May.

That's the highest since apartment lists began tracking this in 2017. And it's all because of a ton of new supply over the last few years. Last year, in fact, saw the most new apartment completions since the mid-1980s. Multifamily construction peaked last year. Now it's on the slide. But there is still a lot of new supply this year as well. and that's the national picture. But of course, all real estate is local, and some markets are seeing much steeper rent declines, namely Austin, Denver, and Phoenix. These are markets that overheated during all that pandemic migration and are now cooling

fast both in rents and in home sales. Good news of course for renters, not necessarily so for the REITs in space, like Avalon Bay, Camden Property Trust, and Equity Residential. Rents are expected to strengthen, though later in the year, as new supplies slowly peters out. John? Diana, does this bear any similarity to commercial, where Class A is actually doing better than everything else, or is it entirely different? Well, multifamily actually is considered commercial real estate, but yes, you're right. We are seeing much more demand for those new buildings with all the amenities, the swanky dog parks,

and the gym in the building and all of that. But overall, we are seeing rents weaken a little bit. Even in that higher end, especially as you get more and more expensive, you're seeing landlords have to give more concessions. All right. Dana Olek, thank you. Now before we go, let's get you set up for tomorrow's big day of earnings featuring more

consumer and tech names. Brown Foreman, Cracker Barrel, and Sienna. Report before the bell. And during overtime, we're going to get numbers from Broadcom, Rubrik, DocuSign, Lululemon, Victoria's Secret, and Vale Resorts. And we're gonna hear from Rubrik's founder and CEO, Bipple Sinha, in a first on CNBC interview right here on Overtime before he dials

into the call with analysts. And on the economic front, investors are gonna be closely watching the weekly jobless claims report. And of course, this is just the one trading day ahead of the jobs report, which a lot has been hinging on and hanging on. We sort of got those ADP numbers today that we started the show with,

the bond market's reaction to. We'll see how the stock market reacts to the real thing with the labor numbers. That's gonna do it for overtime. Fast Money starts now.