Closing Bell - Telsa’s Run Higher & the End of American Exceptionalism? 03/25/25

Episode Date: March 25, 2025

Paul Hickey of Bespoke Investment Group and Jose Rasco of HSBC break down the latest market trends. Rockefeller International Chairman Ruchir Sharma discusses his latest Financial Times piece on the decline of American exceptionalism. Informatica CEO Amit Walia weighs in on cloud, AI, and macro uncertainty. Canaccord Genuity’s George Gianarikas analyzes Tesla’s outlook and its run higher in the past week. Plus, CNBC’s exclusive Global CFO Survey reveals top concerns on inflation, Trump policies, and the Fed’s impact.

That bell marks the end of regulation. Shell ringing the closing bell at the New York Stock Exchange. Palo Alto Networks doing the honors at the NASDAQ in a decidedly calmer day on Wall Street as the NASDAQ adds the solid gains for the week. Boosted again by Tesla, S&P 500 makes a late push higher. The Dow even a little green there. That is the scorecard on Wall Street, but winners stay late. Welcome to Closing Bell Overtime.

I'm John Fort joining today from San Francisco. And I'm Morgan Brennan from CNBC headquarters. Ahead on today's show, the bull case for Tesla. Shares are up more than 20% in a week, and one firm says the stock is poised to head a lot higher, saying any blowback against Elon Musk will be temporary. We're gonna talk to the analyst behind that call. Plus, Rockefeller's Ruchir Sharma says there's a bubble in American exceptionalism and the

rebalancing of global markets that's been taking place this year is just beginning. He will join us to explain why. And the granddaddy of meme stocks reports this hour. We'll bring you the numbers from GameStop and any commentary about investing in Bitcoin. First though, let's bring in bespoke investment group co-founder Paul Hickey and HSBC Global Private Banking and Wealth Management CIO Jose Rasko. Guys, good afternoon. So Paul, looking to have the market ended a bit higher here. Still, consumers feel like we're in a recession but the data and the markets

say we're not are consumers prophetic here are they chicken littles what's going on you know i think at this point they may be chicken littles uh... you know the number like you said the number one concern right now has been the economy and how are all this is this you know uptick in the uncertainty going to impact the actual data? Well, the soft data looks terrible. If you look at the soft data, you'd say we're in a recession right now,

especially after today's consumer confidence report. But it's a matter of actions speaking louder than words. And when you look at the hard data, we're not seeing nearly the collapse that we're seeing in the soft data. And over the last week, you've seen housing starts, building permits, industrial production, capacity utilization, new home sales today.

We're all either in line with or better than expected. So that suggests that at this point, we haven't seen that transfer from not feeling good to actually not being good. Okay, Jose, if you believe then the macro data and you're watching this rotation that's happening in equities, what should you do if you're playing at home? Well I think I totally agree with Paul first of all and but I think it's important to remember that people we've gone from a situation where we were expecting to unleash animal spirits and what have we had? We've had fear. Fear and

turbulence and uncertainty. And so I think we need to eliminate those words from our vocabulary. We need to see a lot more from deregulation from the Trump administration. And I think it's going to take time for tariffs to kick in, prices to go up and prices to come down. Is that going to be enough time for the Fed in June? Probably not. So my suggestion would be I think we're going to see more of this turbulence and therefore we've downgraded US equities for the short term and we've moved abroad a little more, increased our weights in both Europe and China. But I think if you look at earnings going forward, I totally agree with Paul, I think

the soft data is going to be proven false. If you look at the control group on retail sales in February, John, that was very strong. It was very, you know, it suggested the consumers looking pretty good in Q1. Not great, but much better than people thought. Paul, we had Ryan Dietrich on the show yesterday, and one of the points he raised was the fact that to a T, it has been seasonality playing out in this market over the last couple weeks as well, and went as far as to venture that maybe we had seen the bottom. In terms of this market correction. To so given the fact that you look at historical reference points

how much is that factoring in. You are entering some seasonally better times and- what you look what you look at in these sort of volatility shocks and like Jose was just saying- volatility could continue here but we already do

see the VIX below 20. But when you see these sharp corrections from all time highs, when you see strong breath readings back to back plus 400 days in the S&P 500, like we had last week, those have presumably to have typically been positive over the next three, six and 12 months. And you look at today in the consumer confidence report, the percentage of consumers expecting stock prices

to go lower over the next year saw one of the sharpest increases on record. And when you look back at those prior periods, that is the time that stocks have tended to do well going forward. And it's a complete reversal of what we saw last November. You were talking about a guest coming on saying there's a complete reversal of what we saw last November. You were talking about a guest coming on saying there's a bubble in American exceptionalism. That was probably

back in October and November of last year. But we've seen a complete reversal of that optimism that we saw towards the end of last year. And the pendulum has started to shift the other way. And when you start to see encouraging now is the market not going down on bad news, like this consumer confidence report today, and shares of Tesla, which had horrible February sales in Europe, the stock was actually up today.

So in that respect, when you start seeing things stop going down on bad news, that's an encouraging sign. Okay, I wanna note that GameStop is out. We're going through those results right now. We'll bring them to you in just a moment. In the meantime, Jose, you know, it's worth noting the fact that we came into this year

with valuations very rich for S&P and other stocks. How much of this, to your point, the fact that we've seen these revisions in earnings, the fact that you have seen multiples come down how much of this is just normalization especially as to as we come out of a boost of fiscal stimulus over the last couple of years and and all of the tail end effects of the pandemic. Yeah and look I think markets been up 20 percent or more for two consecutive years historically that does not happen very often the year, we tend to get usually three quarters of the time, we get a good market return, but it's about half of what you've seen the prior two years. And that's what we're looking for here. And I think the

bottom line is, it's an earnings driven market. Right now, we're pricing in fear on slower growth, and we priced it in, I would say 100%. There's people talking of recession, we priced in higher prices, and we priced in lower corporate margins. And we look at what we've done to earnings through this year, down from 15% to 10.5%. Next year going up to 14.5%. So I think American exceptionalism, I would argue I agree with my fellow guest, is not dead. And in fact, if you look at the secular themes, they are very much in play.

And I think the US.s. economy looks good not great we talked about it's long last year this year so i think we're looking at a slower economy this year but recession no and i think people are pricing in too many doomsday scenarios and that has to begin to change it when you look at that bull bear ratio something we look at a lot and it's it's pretty negative uh... that something that also is a signal historically that historically that better times are ahead in terms of equities.

Optimistic start to overtime, Jose, Paul, thanks to you both. Right now, as we mentioned, GameStop earnings are out. The stock is spiking. Julia Borsten has the numbers. Julia? The company reporting adjusted earnings of 30 cents per share that is up 36% year over year. We're not comparing that due to low analyst coverage. Looking at revenues, the company's revenue of 1.28 billion was down 28% year over year.

But in terms of other news here that's driving the stock higher in after hours trading, the company announcing that the board has unanimously approved an update to its investment policy to add bitcoin as a treasury reserve asset. So there's been a lot of speculation about GameStop moving into the bitcoin space and this appears to be the official announcement of that news. Back over to you. There you go Julia Borson, thank you. And now for more on today's week consumer confidence number let's bring in our Courtney Reagan at the shop talk conference in Las Vegas court Hi, John. Yes, it's interesting. This sort of echoes what Paul Hickey was saying I've spoken to five retail CEOs here today so far shop talk and there's really more fear of a consumer pullback than reality So gap Inc put up a strong fourth quarter grew comparable sales still though gave hesitant guidance and shares down 9% this year, but well outperforming

specialty apparel peers. I asked CEO Richard Dixon if the falling consumer confidence numbers this morning matched what he's seeing. Gap Inc., our portfolio, or Navy, Gap, Banana, Athleta, is breaking through with great product and great storytelling. We have a lot more room to grow and despite the challenging times that we're all living in it's our job to execute with excellence and create the demand that appeals to consumers. Like Gap, Stitch Fix also going through a transformation aiming to return to growth but despite external pressures order values are increasing.

Momentum continued into February has continued into March and we feel really confident that the service that we offer our clients is one that really resonates despite any macro conditions. Shark Ninja CEO Mark Barocas, he is a little bit more concerned. I think the consumer is stressed anywhere in the world right now. I mean, they've experienced inflationary challenges. I think it's even more so in Europe than it is in the United States. We're competing not just against other consumer products, we're competing against going out to dinner,

we're competing against going on vacation. Still, Barocas is confident its products will cut through the noise and drive 10 to 12 percent revenue growth this year. John, Morgan? Court, hopefully not too much of a curveball here. Inventories, when there's so much uncertainty, even if CEOs are feeling pretty good, I wonder are they prepared for either unexpected demand or in this case, an unexpected slack off in demand,

maybe if they built up inventory ahead of tariff fears that could end up being a problem for them down the line. So we just heard from a bunch of retailers, right? They sort of wrapped up the earnings season and we got their inventory numbers and very few had much higher inventories than expected, or say what would match the historical sales trends, right? You want to keep your inventory levels in line

with what your sales expectations are. And by and large, they were. There was a couple, maybe outliers, but almost all of it could be explained with sort of a changing product cycle, rather than trying to hurry up and get product in ahead of potential tariffs coming in. So I think that that's really interesting.

And then remember, some of the retail tariffs that may be coming in are going to be on more perishable items. When we're talking about tariffs in Mexico, it's a lot of the food that we eat. So the avocados, the strawberries, that's kind of just in time, right? You can't really bring those in in advance. And so many of these retailers have been mitigating their potential tariff risk over the last five, even maybe seven years. And so China is much less of an issue for an apparel player, like many of the folks that we've talked to today, than maybe it was five to seven years ago.

Some great insights from Vegas. Courtney Reagan, thank you for bringing them to us. Thanks, Morgan. Now let's turn to senior markets commentator Mike Santoli for a look at the performance of stocks versus bonds. Mike. Yeah, Morgan, we're in the last few days of the first quarter, so there's been some attention on the divergence in performance,

bonds outperforming stocks year to date, and what it might mean for the need for things like pension funds and target date funds, big asset allocators to perhaps rebalance out of fixed income and into equity. So there is room for that. This basically shows total stock market has been trailing the total return of the aggregate bond index by about four percentage points.

That's a pretty decent spread on a three month basis, although you do see how wide the spread was just a couple of weeks ago before that big rebound rally had started. Some of the estimates are that there will still be a pretty sizable bid in stocks as we head into the end of the quarter. And then monitoring another potential driver of this return of risk appetites, the capital markets related sectors of this market.

This is a five-year chart. This is private equity stocks with the publicly traded shares of private equity firms. And then recent IPOs here. You see very similar cadences. This was the big SPAC IPO bubble in early 2021. And they've kind of bounced just a little bit, but definitely not running away to the upside here.

We did have some prominent IPO announcements and filings in the last couple of days, a couple of LBOs, but nothing that seems like the big rush that a lot of people were thinking might happen is here yet, guys. It is fascinating. I mean, look at the Renaissance IPO ETF,

and it's been under pressure, you know, across almost every metric, except maybe perhaps the last week, to your point, where we've seen this, you know, we've seen this jump as some of this activity starts to rekindle perhaps. I was having a conversation with somebody very involved in investment banking earlier today who was also pointing out that despite some of the headlines out there about M&A activity, when you look at large transactions, so in the hundreds of millions and billions

of dollars, that's actually been trending higher as well, despite what some of the data has been suggesting. I would say maybe trending higher, certainly globally, but off of a low base. There's no doubt about it. I just feel as if there was

people kind of rushed to a point at the end of last year feeling as if the floodgates were going to open. We still haven't quite seen that yet, but there's absolutely still room. And one thing I would point out, the credit markets are still very much inviting that

kind of thing to have M&A maybe follow through. So we'll see if that does happen. All right. Mike, we'll see you again in just a little bit. Now when we come back, we're going to talk to Rockefeller's Roshir Sharma about why he says we are witnessing the end of American exceptionalism and where in the world he sees better investment opportunities. And later we'll talk to a Tesla analyst who says any brand damage to the company could

be temporary and the stock could have plenty of upside after a nearly 30% rally in a week over times back in two. Welcome back stocks bouncing back from their slump this week, but the three major averages remain lower this month and they are on track for back to back monthly losses. This is something that hasn't happened since October of 2023. So is this recent underperformance a sign that American exceptionalism is over? Well joining us now is Rishir Sharma from Rockefeller International. And Rishir, looking at this article, this report you put out, you would argue it is.

Yeah, this is the follow-up to what I had written in December last year, when I called this the mother of all bubbles. And the reason I had called it that was not so much because I felt the American market per se was a bubble, but the gap in the performance between America and the rest of the world had clearly reached bubbly proportions. And how do I measure that? I think if you look at valuations, if you look at the price performance,

and then you also look at sentiment, everybody thought that the only place in the world worth investing in is America, and that also was showing up in the dollar overvaluation. So I'd say that what we are seeing now are the early signs of that reversing. And my feeling is that capital has barely moved to reflect this change. There's been a fundamental change as well that the other countries are getting their act together under such enormous pressure that they've been facing of capital flight and economic underperformance. So I think that this massive gap which had opened up in performance between America and the rest of the world, which got to be known on Wall Street as

American exceptionalism, that gap has started to close and we still have a long way to go. So when you say it started to close but still has a long way to go, how much further does it have to go? And I ask that knowing that we just had a very swift drawdown in the S&P, 10% correction in a matter of weeks,

even as we have seen other averages like the DAX, for example, in Germany touching record highs. Yeah, but if you look at the underperformance here, this goes back 15 years. So all we have seen is one very sharp quarter of the reversal of that. And that happened because America's economic growth and earnings were also very superior

to the rest of the world, particularly in the last couple of years. But as I made the point to you in the past as well, I think that a lot of that happened because America's economic growth was artificially inflated by very heavy government spending and by the role of government in general. The American economy has never been this government dependent. As it comes off,

that incredible amount of government over-dependence, partly because that was the natural government over dependence, partly because that was the natural thing to happen and partly because that's what the Trump administration is also trying for. I think the growth gap and the earnings gap between the US and the rest of the world also closes. So now one very simple way of looking at it is this, that America's share in the global economy today is just under 30%.

America's share, let's say, in the global MSCI equity benchmark is still close to 65%. So this is a massive disconnect. Now, America will always remain the world's dominant capital market, but even a decade ago, America's share in that index was below 50%. So can we underperform significantly enough for that share to get back to around 50%? I think that's possible. So in the next three to five years, the American stock market, I'm less inclined to believe whether it goes up or down, but I feel very strongly that the American stock market underperforms

the rest of the world and America's weight in the global benchmarks comes back to a more reasonable level of closer to 50 percent rather than 65 percent that we are today. So we're seeing the economic data here in the U.S. soften, and you can make the argument that that softening was happening even before President Trump was inaugurated, took office, and we started hearing all the noise and seeing all the uncertainty around trade policy and tariffs take effect. It raises the question, if the US economy continues to soften, perhaps even go into a recession,

can the rest of the world continue to, I guess, close that gap and outperform? I think so, because this is a very unusual cycle, Morgan, because what happened in the cycle is the following, which is that this time when the American stock market went up, particularly in the last couple of years, the rest of the world's stock markets did not go up in sympathy. If you look at even the past bubbles like 99, 2000, when the American stock market was on turbo charge, the other stock markets also got a massive lift from it. This time

that just didn't happen because so much capital got sucked in to the United States away from those markets. Foreigners, especially Europeans, piled into the American stock market like never before. So now what you're seeing, fact is this negative correlation and we're seeing it even the past couple of weeks that as the American stock market has rebounded a bit, it's not surprising in fact that the European and even the Chinese stock markets have been softening a bit. So this is a massive change in relationship. We're used to thinking of the very past relationships,

which is the fact that whenever the American stock market goes down, the world stock markets get a lift. When America goes down, the rest of the world also goes down with it. This relationship has fundamentally changed, and this is a big behavioral change, which I think has not been properly appreciated or internalized. And yet the markets are showing you that there is now almost a negative correlation between America and the rest of the world. Rishir Sharma, that's why I love having you on.

You bring us the context and the nuance. Appreciate it. Thank you. Up next, the CEO of data management company Informatica joins me here in San Francisco after a rough start to the year for his company's stock. We're going to talk AI, the volatility in tech, and much more. Plus, Tesla also getting a boost today, up nearly 30% in a week. Analysts at Canaccord think the stock still has more than $100 a share of upside ahead.

We will hear that bull case, when overtime returns. Welcome back. Big tech rebounding in the past few sessions. Mag-7 up more than 6% since Friday. But Alibaba Chairman Joe Tsai pouring some cold water on high levels of AI spending, saying at a Hong Kong investment summit, he sees the beginning of some kind of bubble around AI investments in the United States. Well, joining me here in San Francisco is Informatica CEO, Amit Walia. Informatica uses AI to help power its data management and government tools across multiple

clouds. Great to have you here in studio. Great to be here in San Francisco, so thanks. Let me ask you about what Josiah is saying here. The way I think about it is you've got the hyperscalers who have their clouds that they're building out, then you've got everybody else. If there's an overbuild, the hyperscalers have plenty of money and resources to sort of wait out a digestion period, but maybe not everybody

else does. John, good to be here. Thank you. What a lovely view. Good to be in the Bay Area versus New York with you. Yeah. But look, I think I look at this as an analogy to when the freeways were being built back in the U.S., right?

We had to build the freeways. And did we build, connect more cities than we needed to in the beginning where the traffic was not there? Maybe we did. And I think that's okay. In every new technology curve, some of that happens. I think the way I look at it is that

some amount of over-build may happen. And I think what I'm more excited is, ultimately that CAPEX, that infrastructure build, has to put to use. Where applications have to be built, the data from those applications have to be brought to customers for them to use. And I think that's the curve in which work is happening right now.

Of course, that's behind the infrastructure bill right now, the pace of that. And I think I see that economy definitely growing. And I think we're all working on that for the infrastructure bill to be put to use for our customers. You are also dealing with a transition continuing into the cloud and some choppiness in that over the last quarter certainly affected the stock. Peeling that back a little bit, what are you hearing from big customers? Why the unevenness in renewals?

And what does that signal either about the economy or about their certainty around their technology evolution? I think it's that time of the year. Look, step back. What happened for us is that, look, we are going through a on-prem to cloud transition. Not for the faint of heart, especially to do it as a public company.

And what I get excited is that our cloud business, which has in the last eight to nine years gone from zero to this year being guided to a billion dollar of ARR, guided to growing 25%. Nothing to sneeze at, we are proud of it, with an NRA of 120% plus and thousands of customers. And I think we have squarely focused on that, and look, this year that will be 60% of our total ARR, and you know, John, once that happens, we inflect to total ARR growing a lot faster.

What companies like Adobe, Intuit of the world have done in the past, we're doing it now. I think what happened for us is basically we are going through that phase, has its own lumpiness sometimes. It is like accounting, there is other choppiness that comes into play that impacted us, but we're squarely focused on grow the cloud business because that's the one that will ultimately turn the tide for the total ARR to be growing into high single digits

to double digits. The way I think about it, you guys at Informatica are one of those really at the base foundational level of this AI transition because data management, being able to do that right, everything AI wise is built on top of that. Is the data available? Is it the right data, the safe data for various agents to even access? At what point is the bulk of your customer base in having their data management policy

and their data positioned correctly for that AI inflection? Yeah, and that is the exciting part of what's happening right now. Look, our AI is through the lens of our AI called Clare. We started our journey back in 2018, back in the machine learning days, Clare was basically doing machine learning driven AI. When Genic AI came by, we had a copilot out,

we had our Claire GPT out more than a year ago now, and by the way, in our user conference in May, we'll be announcing our whole agentic Claire strategy and go live with that. And what we're seeing is actually, in fact, we have Claire GPT being used by hundreds of customers, doing exactly the kind of work in terms of experiments and POCs to get ready for the things you're saying.

Hey, I want to bring the right data through the models to be trained to put to use for, let's say, customer sentiment analysis. But not only do I have to bring a lot of data, it has to be good quality data. Those are all things that we do. And then before I go into true production, people have to start thinking about AI governance,

because without governance, you can have wrong things happen at the wrong time. And where the current human intervention has to be there, accessing that particular workflow, versus it being fully automated. And we are seeing customers do that. Actually we are. We had almost, we have recipes being designed,

but I think where we are in enterprises, customers did in the early stages. We haven't seen full scale productions go live yet. Lots of work happening though. I do see end of this year, beginning of next year, that inflection curve going like again, in a much more volume way. All right. We'll watch for it. Wally from Informatica, thanks for being with us here in San Francisco. Morgan. Well, it's time now for a CNBC News Update with Seema Modi.

Hi Seema. Hi Morgan. A coalition of states asking a federal judge to force FEMA to release disaster relief funding that have remained frozen despite successfully suing the Trump administration over its federal funding freeze. In a court filing, the state said the funding has been frozen as early as February 7th. The DOJ said in a filing earlier this month, a majority of the funding is related to FEMA's review process. A federal appeals court has allowed the Trump administration to pause efforts to resettle

refugees while the legal fight over the freeze continues. But the court said today refugees who were conditionally approved to enter by January 20th will be exempt. In late February, a federal judge temporarily blocked the president's freeze on the program. And get this, a new survey from Deloitte tracking trends in digital media found over 50% of Gen Zers prefer social media content over big budget entertainment. The survey found younger consumers, trusted creators more and felt a more personal connection to them boosting at engagement Son of the times Morgan back to you certainly is see my mode. Thank you up next Apple making a big announcement today as the stock logs another day in the green after a rough start to the year

Shares finished up more than 1% We've got those details straight ahead and some praise for Powell will bring you the results of our CNBC CFO Council survey including the high confidence the business community has in the Fed. And check out shares of GameStop. Those are moving higher after the company updated its investment policy to add Bitcoin as a Treasury Reserve asset. Perhaps not surprising, you can see those shares are up almost 7% right now. We'll be right back Welcome back Tesla shares are recharging over the past week up nearly 30%

But still down 32% since President Trump took office. Our next guest sees a silver lining for the company reiterating his buy rating on the stock today with a price target of 404 bucks per share currently trading at about 288 is where we close. Let's bring in Canaccord Genuity Managing Director George Genarikis. George, it's good to have you on the show. Why are you so bullish on Tesla here, especially given everything we've seen in terms of brand dynamics and controversy around Tesla

and around Elon Musk? Well, first to focus on the very short term around deliveries, we think the market is probably inappropriately dissecting the current numbers. I mean, the company very specifically said on their fourth quarter earnings call that there will be supply issues in the first quarter based on the fact that they're changing lines to introduce the new Model Y.

In addition to that, then people are probably waiting for the new Model Y. So if there has been any brand impact to Tesla, this quarter is the wrong one to figure that out. We're going to have to see Q2, Q3, Q4, whether or not there's a long-lasting brand impact. And second, over the near to medium to long term, there's a robo taxi launch in June. There are new models to be introduced throughout the year. There's a ramping Optimus volume. So we feel like the market has probably inappropriately dissected the current issues and is forgetting the near to medium to long-term catalysts

that we have going for the song. I'm glad you brought up Optimus. This is the humanoid robots that tends to get overlooked in the Tesla story on a quarter to quarter basis, which brings me back to your note where you talk about the fact that you visited some of Tesla's locations, including the Cortex data center, which is powering and training full self-driving and optimist. You call this the MIT for vehicular and humanoid robots. Do you think investors fully appreciate the AI play that is Tesla?

We have these debates all the time about whether this is a car company or tech company. It's really over the long term, an AI company, but because right now we're focused on vehicle sales, right? And I'm pretty sure that's why the stock had a significant drawdown in the first quarter. But if you can look forward one, two, three, five years, AI for now will get monetized in two ways.

First of all, AI gets monetized because they have full self-driving, supervised, and in the future, unsupervised, which means eyes off, hands off. And beyond that, there are the humanoid robots. That Cortex data center is training vehicles, and in the future, it'll be training optimist robots. So I'm pretty sure that there are several employees in the Tesla factory who are wearing sensors to help train future robots. So it's a big long-term driver, but we just don't know how to model it yet, to be frank.

Lots of analysts have put up numbers on it. Speaking of, yeah, speaking of modeling, George, question about China. So on the positive side, there's this 30-day full self-driving trial going on there. But then, how are you modeling the China exposure when it comes to Elon Musk's closeness to the Trump administration. Is there any risk there, depending on how the president's policy toward China unfolds? There's certainly risk. A significant amount of Tesla sales come from China.

China helped in a big way 2024, is helping 2025 so far from all the public data that we have. So it's a big part of their vehicle sales. And in the future, they hope to monetize full self-driving in China. So to the extent any political issues translate in reduced sales or reduced exposure to China, that is without a doubt a risk, Dossel.

So what's your expectation on whether that happens and how investors should position or you'll position if it does Look if something bad happens, obviously we'll have to take that into consideration But so far, I mean there's significant momentum in China both for Tesla and for the broader EV ecosystem And despite some fits and starts we expect full self-driving to get deployed in China in the near to medium term Even though there have been some issues recently there. All right.

We'll watch it. George, thank you. George Gianarikos. Thanks for having me. Up next, not so great expectations. We will look at why such a large gulf exists between consumers' current financial situations and what they expect in the future. And check out shares of CrowdStrike.

One of the big winners in the S&P 500 today, BTIG upgrading the cybersecurity company from neutral to buy with a $431 price target, saying it believes Wall Street's revenue expectations are too low. We'll be right back. Welcome back. Tesla shares are recharging over the past week, up nearly 30%, but still down 32% since President Trump took office. Our next guest sees a silver lining for the company, reiterating his buy rating on the stock today with a price target of $404 per share.

We're currently trading at about $ 288 is where we close. Let's bring in Canaccord Genuity Managing Director, George Genarikis. George, it's good to have you on the show. Why are you so bullish on Tesla here, especially given everything we've seen in terms of brand dynamics and controversy around Tesla and around Elon Musk?

So first to focus on the very short term around deliveries, we think the market is probably inappropriately dissecting the current numbers. I mean, the company very specifically said on their fourth quarter earnings call that there will be supply issues in the first quarter based on the fact that they're changing lines to introduce the new Model Y. In addition to that, then people are probably waiting for the new Model Y. So if there has been any brand impact to Tesla,

this quarter is the wrong one to figure that out. We're gonna have to see Q2, Q3, Q4, whether or not there's a long lasting brand impact. And second, over the near to medium to long term, there's a robotaxi launch in June, there are new models to be introduced throughout the year, there's ramping Optimus volume. So we feel like the market has probably inappropriately dissected the current issues

and is forgetting the near to medium to long-term catalysts that we have going for the stock. I'm glad you brought up Optimus. This is the humanoid robots that tends to get overlooked in the Tesla story on a quarter to quarter basis, which brings me back to your note where you talk about the fact that you visited some of Tesla's locations including the Cortex data center, which is powering and training, full self driving and optimist. You call this the MIT for vehicular and humanoid robots.

Do you think investors fully appreciate the AI play that is Tesla? We have these debates all the time about whether this is a car company or tech company. It's really over the long term, an AI company, but because right now we're focused on vehicle sales, right? And I'm pretty sure that's why the stock had a significant drawdown in the first quarter.

But if you can look forward one, two, three, five years, AI for now will get monetized in two ways. First of all, AI gets monetized because they have full forward one, two, three, five years. AI for now will get monetized in two ways. First of all, AI gets monetized because they have full self-driving, supervised, and in the future unsupervised, which means eyes off, hands off. And beyond that, there are the humanoid robots. That Cortex data center is training vehicles, and in the future, it'll be training optimist robots. So I'm pretty sure that there are several employees in the Tesla factory who are wearing sensors

to help train future robots. So it's a big long-term driver, but we just don't know how to model it yet, to be frank. Lots of analysts have put out numbers on. Speaking of, yeah, speaking of modeling, George, question about China. So on the positive side, there's this 30-day full self-driving trial going on there.

But then, how are you modeling the China exposure when it comes to Elon Musk's closeness to the Trump administration? Is there any risk there, depending on how the president's policy toward China unfolds? There's certainly risk. A significant amount of Tesla sales come from China. China helped in a big way in 2024, is helping 2025 so far from all the public data that we have. So it's a big part of their vehicle sales.

And in the future, they hope to monetize full self-driving in China. So to the extent any political issues translate and reduced sales or reduced exposure to China, that is without a doubt a risk. So what's your expectation on whether that happens and how investors should position or you'll position if it does? Look, if something bad happens, obviously we'll have to take that into consideration, but so far, I mean, there's significant momentum in China, both for Tesla and for the broader EV ecosystem.

And despite some fits and starts, we expect full self-driving to get deployed in China in the near to medium term, even though there have been some issues recently there. All right. We'll watch it. George, thank you. George, thanks for having us. Up next, not so great expectations. We will look at why such a large gulf exists between consumers' current financial situations and what they expect in the future. And check out shares of CrowdStrike. One of the big winners in the S&P 500 today, VTIG upgrading the cybersecurity company from neutral to buy with a $431 price target, saying it believes Wall Street's revenue expectations

are too low. We'll be right back Welcome back to overtime Mike Santoli returns with a look at the gap in consumer expectations and current financial conditions. Mike? Yeah, John, and that gap has really widened out to some extreme levels. That's the bottom number here, the expectations component of the consumer confidence survey. Now, overall confidence was a little bit of a miss. It's in this middling range. You see present situation, it's sort of knocking around where it's been over the last couple of years, well below the pre-COVID levels. But that orange line there, expectations really hitting the floor.

And this is basically for expectations going ahead six months, let's say. So you're going back to the post global financial crisis period that malaise when people were really concerned things were never going to really get better. Now there is something normal about people saying things are fine now, we expect them to get a little bit worse down the road. Once an expansion has been rolling for a while, that's sort of the natural state of things. What is interesting though is it also reflects this general divide between how people say they feel about the economy of the future and how they're acting. So here's the present situation when people are asked how are

your household finances right now and in the latest month those who saying it's good actually perked up a little bit and those are saying that it's bad went down somewhat and that's a very healthy gap between these two measures and the expectations piece is happening because people are saying that they think the job market is going to get worse in six months, inflation might be worse. It's also very skewed toward older households, households headed by somebody above 55, really poor expectations. So obviously the kind of chaotic, noisy policy environment right now seems to be taking a

toll a little bit more than what people are seeing in their day-to-day in terms of the economy or jobs or incomes. The idea that it's mostly families over 65 having this concern suggests to me that it's less... 55, okay that makes more sense. I was wondering if there's a clarity in the mix between concerns about job stability versus higher prices, if it's older people, I would be inclined to think it's more about higher prices. It is definitely higher prices, but also I think whenever you see the survey work about older consumers feeling a certain way, it's people who read and look at a lot of news

tend to actually have that kind of response. The other thing though, there is an income component too. And so lower income households are reporting, obviously being a bit more strapped and thinking things might be a little tougher going ahead. But again, this is why all of Wall Street is sort of scrutinizing every incoming hard data point to say, are we seeing it flow through

from attitudes into behavior? Any sense of whether we're seeing the impact of government job cuts or perhaps concerns about the social safety net? I think it's more about concerns about what all these changes are going to mean. It's pretty tough to find the government job cuts finding their way into, first of all, even weekly unemployment claims or the monthly payroll data. It's big in little bursts for the agencies affected. In the aggregate, it's probably not move the needle, but I do think all of the concern

about it is building and the idea that it just seems like the stuff's moving too fast and we're not sure if something's going to break along the way. All right. Mike Santoli, thank you. Our inflation fear is causing Wall Street CFOs to lose a lot of sleep. Well, the results of the latest CNBC CFO Council survey are next. And don't forget, you can catch us on the go by following the Closing Bell Overtime podcast on your favorite podcast app. We will be right back.