Closing Bell - Tesla Earnings; CEO Interviews with EQT & Alcoa 10/22/25

Episode Date: October 22, 2025

A jam-packed earnings day brings major market movers. Barbara Doran of BD8 Capital joins to break down the action alongside Mike Santoli, while Craig Irwin of Roth Capital reacts to Tesla’s results. We’ll also hear from Toby Rice, CEO of EQT, on natural gas and energy dynamics, and Greg Tuorto of Goldman Sachs on how to play small caps. Alcoa CEO William Oplinger weighs in before the earnings call on the company’s latest quarter.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

That's the under regulation, the Wisconsin School of Business. We're bringing the closing belt in the New York Stock Exchange. BTC development doing the honors of the NASDAQ. Stocks lower today, but off-session lows. The Dow losing 300 points, down half a percent on the S&P 500. The NASDAQ down about 1%. Slightly bigger loss for the Russell 2000. Tech, the worst performing sector on the S&P 500 today.

Communication services led lower by Netflix. Staples and healthcare were the best performing sectors, given the fact that this was a more defensive tilted market. The yield on the 10-year note also holding steady today, a little bit below 4%. But there is economic data to look forward to. We will get CPI on Friday a week late, plus gold turning around during the session higher now. And of course, that's after a dramatic swoon yesterday. Yeah, and that's a scorecard on Wall Street, but winter stay late.

Welcome to closing about overtime. I'm John Ford alongside Morgan Brennan. Ahead earnings from Tesla, the stock's up 33% in three months. Will the report justify the run-up? We've got the numbers and instant reaction. Plus, we will hear from IBM as the race for AI dollars continues to intensify. And Alcoa set to report this hour. The CEO will join us ahead of the conference call.

We're going to talk global demand and its new deal with the White House to build in Australia as the race to produce rare earth minerals heats up. Yeah, Christina Parts and Nevelas is at the NASDAQ with more on the markets in the meantime, though. Christina. I'm actually standing right behind you. Ah, ha! Surprise! Guys, Texas Instruments. Let's talk about that name because shares did close up a little bit lower 6%. It's okay. I'm usually at the NASDAQ. After missing on margins and guidance, the CEO said customer inventories are at low levels and depletion is behind them, but customers just aren't restocking as aggressively as expected.

He called this one one one of the more moderate recoveries in the firm's history. And that warning is weighing on other analog chip names today on semi-NXPI analog devices. You can see just closing all in the red. Switching to gold. Gold turning around. Gold down about 1% on pace to break a nine-week wind streak. Perhaps that changed right before coming here. But the miners don't always move in tandem, though. Many like Newmont, Kinross, Goldfields, all closing with the exception of Newmont, about 2% higher. We had oil that settled about over 2% back in the green after closing in the red the last three weeks,

getting help from hopes of progress of a U.S. trade deal with China and India. And this after, it's been on a gradual sell-off for weeks, dropping about 20% for the year. shares of Exxon, Conocoate Phillips, Diamondback, Devin, all you can see a sea of green between roughly half a percent to 2 percent. The high-flying utility sector coming back down to Earth, the worst performing sector on the S&P so far this week and on pace to break a four-week wind streak. Constellation Energy is down for the fifth straight day, Vistra, and NRG are some of the worst performers on the week so far. John? All right, Christina, right here. Thank you.

Well, joining us now for more on declines, but not right here as we await those. earnings reports, BD8 Capital Partners founder and CEO Barbara Durand and senior markets commentator Mike Santoli. Barb, first, eerie, weird kind of set up to earnings with Netflix down so much like 10% today on, I mean, blame Brazil, a little odd, but what should investors watch for, particularly when it comes to Tesla, perhaps another one that's been hot, reaction-wise, to gauge how the market's feeling? Well, I think the Netflix, you know, draw down is really reflective of what's happening in the market right now. The market is at a PE and forward earnings of about 23. And you saw 10 days ago when you had the threat of 100%

tariff on China. Market had a big swoon. And then last week it recovered until we then had some concerns about two small regional banks and some loan issues, which turn out not to be much of an issue. So I think the market is really is a little bit nervous given the high valuation. And so when you have something like Netflix, which really seems to be a one-off, one-time thing with the Brazilian tax situation, after they hadn't had that, their operating margins would have been higher than even the street expects. So I think there's just nervousness and excuse to take profits in general. So I think just you look at what happened with intuitive surgical. They reported better than expected, and the stock exploded on the upside. So I think

it's really stock specific, but I think we're going to continue to see volatility because of the high valuations. I'll mention that Tesla results have just crossed. We are going through them. Mike, what characterizes this market? A little slight move there on Tesla, initially down about 1.5%. What characterizes this market where we've seen low volatility, relatively speaking, but occasional spikes? Low volatility up until October 10th. That was when we had the 2.7% drop in the S&P 500 that really did break this sort of rotational, harmonious, low volatility climb. It doesn't mean that you have to necessarily spill lower from here.

What it does mean is it's just a little bit less of a reliable in-gear tape. And I think we saw that today, essentially things that seem to have overshot to the upside. The highest momentum, most volatile stuff just gets purged. After the binge, you have a purge. Now, the market's trying to pick it up on the other side and is doing so so far. All right, Mike, I'm going to cut in here because we do have those Tesla results. And Philo has the numbers for us. Hi, Phil.

Hi, Morgan. It is a beat on the top line and a miss on the bottom line for Tesla. The company bringing in revenue better than expected $28.1 billion. The street was expecting $26.36 billion. But EPS comes in at 50 cents a share. 50 cents a share. The street was expecting 55 cents a share. So not a huge miss, but it is a miss nonetheless. We're going to go back through the numbers, guys. Hopefully we'll get some more details in terms of future plans, future obligations. And the kind of concrete details that investors are looking for when it comes to things like robotaxie, autonomous vehicle development, et cetera. We'll let you know when we come across some of those nuggets that are worth flashing. All right. Phil, thank you. We'll be back to you. Shows are down about 1% right now. Barb, want to get your reaction to this, especially since Tesla is not necessarily a name that trades on the fundamentals here. No, it doesn't. I mean, 80% of their revenues are from autos, and yet it's at a 250 plus PE on forward earnings. And it's really on the hopes that it's this the robo taxis.

It's the robots. It's this AI play, which, frankly, I don't see. And the fact that they beat on revenues, you know, it's a question of how much in the pull forward for the EV credit that was expiring September 30th. And I think that's probably what the explanation is there. And, of course, with the earnings miss, that could be pricing. Because even the battery, the storage and battery part, which is a nice high growth area, although the last quarter, it was down 7% year every year, it's only 10% of revenues. And, of course, you're not getting anything from autonomous. driving yet or robots. Those are still sort of pie in the sky and lots of talk about that.

So I just, I'm not surprised Tesla wins down and we'll see what they say on the conference call because, you know, Elon Musk will no doubt talk about rollout plans, but we need specifics at this point. And we also, I want to see what's happening with the new lower priced models, you know, the three and the Y because they have lower range. They don't have as much capability and they're not all that cheap. So we'll see how those sales are going. Okay. We're Moving back here towards the flat line in terms of shares of Tesla right now, Mike, how much does this set the stage, if at all, for the other AI players that we'll be talking about here with earnings in coming days and coming weeks?

Yeah, I'm not sure that it's going to necessarily dictate how we react to the rest of them, mostly because it's not so much about, you know, Tesla coming out and committing to new KAPX numbers or having any real knock-on effects in terms of the other players in their earnings. Tesla's in an interesting spot because it's doubled off the April lows. But on a year-to-date basis, it's only up 8-9 percent. It's actually underperformed because it had such a huge run after the election late last year. That means it's not getting sold as aggressively as some of the year-to-date winners are.

There's been a massive rotation from the stuff that's led so far this year into the laggard. So it's caught up in the whipsaw to some degree. I don't really see it as telling us a whole lot except for about people's willingness to believe in the very long-term story and to essentially play the high beta parts of this market. Mike, hold tight. IBM earnings are out. Let me get you those numbers. The results are a beat on the top and bottom lines. You see the stock moving lower.

I'll tell you why that might be in just a moment. Guidance raised for Q4 in effect because the full year is raised. So there's an asterisk on the beat. Get to that in the moment. But revenue beat at $16.33 billion versus $1.19. consensus. The upside, though, did not come from software overall. Software at 7.21 billion in line with consensus. Consulting, though, did beat at 5.32 billion versus 5.24 expected. Infrastructure in this mainframe cycle is up 15 percent in constant currency, which also accounts for a big amount of

the beat. Now, for the full year, constant currency revenue growth of more than 5 percent now is what IBM is guiding to, up from at least 5% from the last release. A free cash flow for the full year at $14 billion, up from $13.5. Now, I did speak with IBM CEO, Arvin Krishna, about the quarter just a little bit ago. The reason why software was just in line was Red Hat. It was up less than expected while other AI-related business did better than expected. Krishna did tell me the Red Hat miss is just a blip. Here's some of what he said.

red hat did 12% instead of 14% he told me which it did last quarter you don't see me worried about it because our booking's growth remained strong at 20%. We did have some weakness earlier in Q4 late 23. Sorry in 24 late 23. So by the end of this year, that all kind of washes itself out. In other words, this was a little bit of an execution issue as the Salesforce was figuring out how better to sell Red Hat to customers, what they wanted to see. They figured that out. This is just like. a bubble moving through the system. Now, on what is strong, he mentioned HashiCorp, which is a multi-cloud, hybrid cloud type product that IBM did purchase. And I asked him about the AWS outage and how much that is feeding into the idea that customers ought to be on multiple clouds. Here's what he said about that. He said, I would look at you and tell you that Hashi is on fire. Our bookings, demand for Hashi are off the charts significantly higher than when they were a standalone company. Part of it is we have a bigger reach.

But part of it also, John, it's to the point you just made that people are now waking up to. In order to be resilient, you need to be on more than one infrastructure. You can see that stock now down, Morgan, about 4% here in overtime. Interesting. All right. Well, we also have Alcoa numbers. Is that true? We do.

So we have Alcoa reporting as well. Slightly smaller than expected adjusted loss, a miss on revenue. Adjusted EBITDA down 14% versus last quarter. The company saying increased tariff costs, unfavorable currency impacts playing a factor there. Trade policy also impacting guidance. Tariff costs on higher U.S. imports of aluminum from Canada are expected to increase by approximately $50 million sequentially, quote unquote. And we're going to dig more into the quarter in a first on CNBC interview coming up right here on overtime just a little bit later on the show with Alcoa CEO, William Opplinger. be before their earnings call. And if we look, shares of Alcoa are also in the red right now,

down about one and a half percent. Barb, want to get your reaction to all of this, whether it's IBM, which has been a high flyer this year, or whether it's Alcoa, as we have talked about, the industrial part of the economy and this big focus on things like critical minerals. Yeah, well, IBM is interesting. I'm not surprised it's down because the expectations were very high, or hopeful, I should say, in the software, because IBM have seen it's not on is at new highs, but it's historically at a much higher P.E. than that normally would be. You've seen an expansion this year, and that's because they are viewed as having successfully changed their mix shift, going to higher recurring revenue model where over 50% of their total revenues

are recurring. And a big part of that is the software story. And as you had mentioned, or someone had mentioned earlier, they've missed, Stephanie and LinkedIn on the last show, that they had been a little bit soft in the last quarter. In fact, it's been the last two quarters in software. So people are hoping for a little bit more than a meet, and they did meet expectations. But I think that's the issue here. You know, where do they go from here? It looks like business is solid. But we're waiting to see the gen AI has been accelerating, but that's still a small part of their business. So I want to see, but I think the IBM reminds us that AI is such an important part of the story of so many of these tech names, that if that is not as strong or, you know,

as leading or accelerating, it's a problem for the stock. So I think there for IBM. And I'll Coe, of course, is a commodity play. And commodity plays, there's no barriers to entry. It's really about cost control and also demand at a given moment in time. And, of course, Alco is interesting because they do have this critical minerals play with the gallium that could happen. And they could be up in production as early as 26. And that could be interesting. It could be a higher margin business.

They could have some pricing power there. So we'll see how that plays out. So that's a very interesting thing for them to go forward with. All right. Bob, thank you. Mike Santoli, we'll see you just a little bit later. Well, coming up, instant reaction to Tesla's results. The stock's volatile in overtime. We're back in two.

Welcome back to overtime. Shares at Netflix losing 10% of their values today after reporting results last night. Investors focusing on the earnings miss that was caused by a tax dispute with Brazil. Now, despite strong advertising growth, several brokerages cutting their price targets on the stock today, including Wells Fargo, Wed Bush, Piper Sandler, and J.P. Morgan. A number of firms, though, remaining bullish, bared saying execution around key initiatives remained compelling. Bernstein writing that headlines can be misleading. And overall, it was a solid print. BMO says no ghosts or goblins, just the Brazilian tax man. Morgan.

Well, let's turn to Tesla. The stock moving lower initially, but recovering close to the flat nine now, well, it's down about 1%. Joining us now, it's Craig Irwin, senior research analyst at Roth Capital. Craig, it's great to have you. on. We're still going through this report, which is always the tome every quarter. But do you want to get your initial takeaways, especially as revenue jumps 12% your rear. Yeah. Yeah. I mean, it was 6% above consensus in the quarter. So we knew they were going to beat the quarter right because the expiry of credits, there's always a little bit of a pull forward. The real question is whether or not they created a slightly smaller hole that they get to fill in the

in the December quarter, their language in the outlook statement where they say, it's difficult to measure the impact of shifting global trade and fiscal policies seems to suggest that they don't really have a clear view yet on whether or not the price adjustments that they put through are going to significantly dent the momentum

that they've picked up in the last several months. So, you know, they're being cautious here. You know, the direction of the stock, though, coming out of the call say on Optimus, what they say on, you know, robo taxi, really more than anything right now, and the outlook for them removing the surrogate drivers in these cars, you know, what's the potential there and how do they see this taking shape over the next number of months? And I got to interact with one of the Optimus robot variants a couple of weeks just a couple

of weeks ago at the Upsom. I mean, it's pretty incredible, but it also still seems to me like it has a long way to go here. So how much of this is based on that commentary about the future versus the nearer term, especially when you do see things like, and I think it gets overshadow a lot, you know, the energy business seems to be very strong too. Yeah, energy strong. They're sort of tailwind from, you know, electricity prices up, you know, basically 40%.

You know, over the last few years, it's something that really does improve economics there. They will have real competition in there. They are the largest competitors that they'll dominate like they do in everything that they do. But it's not nearly as large in market, at least in my view, as the potential for Optimus, and then the automotive market. And eventually, EVs will come back and we'll be back in vogue, and Tesla's going to be the category king at that time still. So, you know, you have a variety of things that are kind of working for them. Right now, I'm just excited about Optimus. You know, I think that, you know, the glitchiness that people sometimes talk about is something that gets smoothed out with engineering over time.

So, but how much volatility in the nearer term do investors need to be prepared for? I mean, it's been up for a bit. You're bullish, but your price target, I believe, is still $3.95, which would have almost 10% of downside from here. So given that the market overall, valuation-wise, is a little rich, could it be choppy? Yeah, no, so I'm never one to change my price target, you know, once every couple weeks. I'm not a big believer in that. I think you become more a weather vain than an analyst at that point. You know, fundamentally, I see Tesla as a buy as a long-term buy.

You know, it's had a tremendous move in the last couple of months as people realized that Musk was back in the saddle, that the fences were mended with our president, that there's tremendous potential in several of these initiatives and he's putting his talents to work in there. So, you know, the stock correctly reflects that in the valuation. You know, now the catalysts, I think, or what they choose to show us about Robotaxy, Cybercab,

and what they choose to show us about Optimus. And the bigger question is whether or not they do that today at earnings or on a six in their shareholder meeting. Okay. Craig Irwin, thank you. That Tesla earnings call kicking off at 5.30 Eastern Time. Coming up, Beyond Meat becomes Beyond Meme, some eye-popping numbers on a wild trading day.

And shares of EQT are lower after reporting results. The company dealing with higher costs, lower production. The CEO is about to join us to talk energy and natural gas. Stay with us. Welcome back to overtime meme media fading today. Check out shares of Beyond Meat, which heads been riding the momentum wave. The stock getting as high as $7.69 cents today. but closing 50% below that, intraday high.

Still up, though, 400% this week and up way more since its most recent lows. Check out the volume on this name. More than 2 billion shares traded. This is a record for Beyond Meat. The eight highest volume days for the stock dating back to its 2019 IPO are the last eight trading sessions starting last Monday. And John, I should also note this has been a very highly shorted name. So the short squeeze playing out in the meme mania as well.

well. All right, Morgan, thanks. Well, energy company EQT is lower today. The company reported third quarter earnings results, beating on the top and bottom lines. But fourth quarter capex and production guidance falling below the street's estimates. Joining us now to break down the quarter and the energy complex is EQT president and CEO Toby Rice. Toby, welcome. So tell me about these strategic curtailments. What is it that's happening in the market that has you pumping the break a little bit? Yeah. As an energy producer in this era right now, there's three things that we're focused on, making the energy we produce cheaper, making the energy we produce cleaner. And that third attribute, making the energy we produce more reliable. That is all about making sure that we're delivering our energy to the market, when the market needs it. And given volatility and seasonal swings and prices, there are periods of time, like in October, where prices are low. And we have the opportunity to shut in our production, hold that production for higher prices. price markets and that's exactly what an opportunity that we're taking advantage of here at

EQT. How long do you're seeing better realized pricing as a result? Okay. How long do you expect that to take and to what degree should investors and analysts be able to expect that based on the way they see the prices fluctuating? Well, this has become a normal part of our production operations. Thanks to our vertical integration, we have a tremendous amount of flexibility to increase the reliability of our energy. But we are communicating with our investors. This is going to be about 20 BCF a day of natural gas. So at any given point in time, we could shut in up to a BCF a day to 1.5 BCF a day of natural gas. In the grand scheme of things, when you think about how much energy that we produce at EQT over 2.3 trillion cubic feet of natural gas per year, 20 BCF is not

is not a large in the grand scheme of things. But it is an opportunity for us to get better realizing pricing versus, versus expectations. So Toby, what is your longer term outlook for natural gas and demand for and thus perhaps pricing? I mean, we're hearing about all these LNG deals potentially amid all of these trade deals that are getting struck. And we know the AI compute buildout is going to require a lot of energy. Yeah, the demand store for natural gas is very exciting. We have, you know, three themes that are driving natural gas demand. The first one being the continued evolution of our energy systems, replacing coal with natural gas. That seems to be a little bit on the back burner with this administration as they focus on

the reliability of the energy systems. But that's okay, because we've got two other major themes that we're excited about. The LNG buildout, we are past the halfway mark of doubling our LNG exports. We're on pace to get to over 30 BCF a day of LNG exports by 2030. We're at 18 BCF a day today. That is a massive amount of energy. that's providing energy security to our allies. And then the other major theme that's really materialized over the last 24 months,

you mentioned it, this AI buildout absolutely massive. Our job at EQT is America's natural gas champion is to make sure our tech customers have all the energy they need so they can run full throttle to win this AI race. The estimates for the power demand are all over the board, but let's just look at what Secretary Chris Wright has said to win this race. The U.S. needs to generate over 100 gigawatts of power. to feed the AI revolution that's taking place. And to put that number in perspective,

that is the equivalent of building an energy electric ecosystem capable of powering 20 New York cities. And we've got to do this over the next few years. All of that is going to require a tremendous amount of natural gas and EQT. We're at the front of a lot of those conversations. Yeah, and of course it's not just the gas itself, but it's getting it to the right places too, right?

So what is your outlook for infrastructure? Are you making investments into the midstream piece of this? Yes, part of us being integrated when we did the acquisition of Equitrans back in July of last year, that was a very strategic move for us, making EQT the first large-scale integrated natural gas producer and midstream operator. We operate over 3,000 miles of pipelines. And actually, you know, we just announced this past quarter. One of the highlights of the quarter for us was announcing the success of our MVP boost project where we announced a very successful open season. And given the demand, we increased the capacity of that pipeline by over 20%, which is nice. And we're going to continue to advance on extensions of that pipeline with our Southgate project.

So there's a tremendous demand for energy and infrastructure that needed to move it. And there's some really remarkable things that are shaping up in this country because of this lack of infrastructure. Did you know in January, the highest gas prices in the world will be paid not by Japan, not by Europe. the highest gas prices in the world to be paid by New York. In Boston, Massachusetts, it's absolutely remarkable. Well, let's get some more pipelines up there. Oh, I know. And we have Marcells basically in our backyard, says the New York resident right here.

Toby Rice of EQT. Thank you for joining us. Thanks, everybody. Well, it's time now for a CNBC News update with Kate Rogers. Kate. Hi, Morgan. The White House will reportedly demolish the entire East Wing to make way for the construction of President Trump's $250 million ballroom.

Two White House officials tell NBC News the demolition, rather, will be finished within days, and the plans are much more extensive than previously reported. President Trump said in January that the project wouldn't touch the existing building. CNBC parent company Comcast is listed as one of the top donors on that project. Defense Secretary Pete Hegzath just announced a deadly U.S. strike on a boat carrying drugs in the eastern Pacific yesterday. Hegsafe said the boat was traveling along a known trafficking route and carrying narcotics. he says two people on board were killed. It comes after at least seven previous strikes on alleged drug vessels,

which were all carried out in the Caribbean. And John Bon Jovi is announcing a new tour next year for the band after recovering from vocal cord surgery. The legendary rocker has been off the road since 2022 when he had the procedure. The seven-night tour includes four dates at New York's Madison Square Garden and three in the UK and Ireland. Back over to you, John. Sounds like he got some good medicine. Okay, thanks. Well, we got results from IBM and SAP earlier this hour.

Those stocks are lower in overtime. Coming up, a closer look at the software sector and potential disruptions from AI. And a turnaround in the market today. After finally catching up to the bigger market cap stocks, the Russell 2000 with a pullback. Can small caps get back on track? How much of this is being driven by meme mania?

Overtime. We'll be right back. Welcome back to overtime. A down day for the markets. The Dow down 300 points. The worst of the averages, though, is the Russell 2,000 down 1.5%. More on the small caps coming up. Checking on a couple of the big names reporting results this hour. Tesla's down slightly. IBM off a little more than 5%. Also watching shares of Lamb Research, the chip equipment company beating estimates on earnings and revenue. Guidance for the next quarter. Also above current estimate, stocks up about 3%. Las Vegas Sands also gained. more than 6% beating on earnings and revenue strength in Macau helping results, also raising its dividend and increasing its share buyback program. There's been a shifting narrative on Wall Street in the past three months, with the Russell 2000 nearly doubling the performance of the S&P 500. The move comes as investors bet on cheap multiples, more rate cuts,

and an economy that continues to chug along. But if market volatility picks up during earnings season, can the small caps hold on? Well, with us now is Goldman Sachs asset management portfolio. manager Greg Torto. Greg, it's great to have you on. Let's start right there. Can this rally continue for the small caps? Morgan, thanks for having me. We think it can. I think that, you know, as you talked about, it's been a pretty disruptive and powerful move for the small caps. When these things happen, it's usually, you know, not calm and kind. There's, you know,

some things that break along the way. Large cats have been in the lead for a very, very long time. So I'm not surprised that it's happening a little bit more, you know, differently than we'd expect it to happen. All right. So what do you like here? in the small caps. You know, I think that we like some areas, you know, that I think, you know, have been identified, you know, in the defense and aerospace area, like Kratos.

You know, Kratos is a drone company. It does a lot of other things on the unmanned side. Defense is being remade, as we can see, happening around the world. And I think that that's a company that we think can have, you know, a long-term opportunity with, you know, with how defense spending changes. I'm curious your call on DigitalOcean,

which tends to really, focus on small and medium businesses. They're a technology company that's kind of trying to provide technology services, including AI, cloud backup sort of stuff. What is it about that company and what you see SMB potentially doing transformational in this AI era that has you focused on that? Well, small companies want to look big to their customers. They want to show that their customers are, they want to show the customers that they can do the job of a much bigger company. DigitalOceans, agentic solutions allow those small companies, to serve their customers in a much more effective

and convenient way, they can bring the full services of all that they're trying to do without having to just be a chat bot that gives you four or five different responses when you're trying to interact with a website or when you're looking for something particular. And I think that focus, especially with some of the deep artificial intelligence capabilities that they have, allows them to expand within these small businesses as they grow. And then five below, you say you're watching the labor, market and the consumer. We're hearing some concerns about how that could pan out, particularly the working class consumer being pinched by credit right now. What is it that is going to keep

that going? And how are you gauging it, especially since we're not getting that government labor data during the shutdown? Well, there's a lot of alternative data sources out there that can give you a read on how traffic is going and what the average ticket at a place like five below is and i and i do think that there is some pressure at the low end of the market exacerbated by the government shutdown however i think that with five below in terms of a really solid merchandising slate and you know kind of an increasingly you know kind of more important store location you know i think that they're in a lot of better they're in a lot better places than they had been in the past um does give them a better sense of you know kind of serving what the customers need at the

right price you know i do think it is you know there are some novelties in there that as we get through Halloween. We'll start to see how strong it actually has been. But so far, so good in terms of the traffic and the ticket. Okay. Craig Torto. Thanks for joining us. Thank you. Well, COA shares falling after missing sales estimates and warning of tariff costs. Up next, the aluminum giant's CEO is going to join us. Break down those results in a first on CNBC interview before the call with analysts. And later, Mike Santola is going to come back and look at what's driving the recent reversal in the momentum stock trade, whether it's a red flag, For Wall Street, we're right back.

Let's get another check on Alcoa. Shares lower right now, down about 1.5%. The company posting a miss on revenue and a slightly smaller than expected adjusted loss. Alcoa blaming tariffs for sequential declines and adjusted epida and total aluminum shipments. The company adding that guidance will take a hit because of import costs from Canada,

which are expected to increase due to tariffs. Joining us now before the earnings call, First on CNBC is Alcoa CEO William Opplinger. Bill, it's great to have you back on the show. Welcome. Thanks, Morgan. How are you? Doing great. Want to talk to you about what you saw in the quarter and how that sets you up sets you up for the rest of the year, though, especially since it looks like alumina and aluminum production both increased. But there is some noise because of trade dynamics. So let me talk about the quarter. We did have a miss on revenue. We had some shipments that at the end of the quarter that were in. in transit, didn't get the customers in time to recognize them as revenue. We'll pick all those shipments up in the fourth quarter. I would characterize the quarter as pretty solid. We hit production records in a number of our facilities. The earnings was, you know, met consensus

estimates based on really, really tight cost control. And we executed on a number of strategic initiatives. And I don't know if you saw our Gallium announcement yesterday, but that had been going on in the quarter also. And we just announced that we got a long-term power contract in Messina, New York. So while we missed revenue, I'm pretty pleased with where we got to in the quarter. All right. Let's talk gallium, because this was big news earlier this week in this deal that was announced with Australia and also involves, to a certain extent, Japan, around critical minerals for domestic use here in the U.S. You've actually come on this show and talked about the possibility and the promise of gallium alongside Illumina. So what does this mean

and what does this enable from an Alcoa standpoint? So what we announced over the last day or so is an investment in one of our facilities in Western Australia where we will be able to extract about 10% of the world's gallium. And what that does, to put it in perspective, over 90% of the world's gallium today is extracted and processed in China. This puts Western Australia, our facility in the middle of the supply chain that we can provide gallium to the rest of the world. And we're expecting to get that to market by the end of 2026. So it strengthens the relationship with Alcoa between the U.S. government, the Japanese government, who is a sponsor for the project, and of course the Australian government. So we're really excited and we think we'll

be making metal by the end of next year. Bill, you have an update on how much refinery capacity overall you're going to shut down and how far along you are in that process? So at this point, John, and it's a great question, our refining capacity is in the first quartile, maybe one or two or in the second quartile, the cost curve. So I'm not seeing a need for us to shut down any refining capacity. Aluminat prices have come down fairly sharply over the last 90 days. There is approximately 40% currently of the Chinese market that's underwater. our cost position allows us to continue to run our refineries in a low market, low cost, low price environment. I know I ask you this pretty much every quarter. I'm going to ask it again. And that is, what would it take for you to bring some more of that refining capacity, smelting capacity online here domestically in the U.S., especially given the tariff environment?

I'll answer your question and then transition to a quick update on where we stand in the U.S. But the reason why we would invest in capacity in the U.S. is based on low-cost energy. Wherever you put smelting capacity, it's based on low-cost, competitive, preferably green energy. What we announced today is a long-term power contract with New York Power Authority that takes the oldest smelter in the world and gives it certainty around its ability to run because it's got very competitive power in upstate New York. And it's a big deal for us because we're able to, now that we have a long-term power contract, competitive energy, green energy, we're able to invest in that plant for the long-term future.

All right. Bill Opplinger, Alcoa, CEO. Thanks for joining us. Thanks, Morgan. Well, software is under fire. Up next, we'll break down the stocks most at risk from new enterprise chat GPT functions. They're being rolled out by Open AI. And shares the Southwest, moving higher on the back of strong results. coming in above estimates at 11 cents per share. That's versus expectations of a three cent loss. A slight beat on revenue as well. Passenger revenue per available seat mile.

This is a key metric for the airline industry. That was in line with estimates. And the company saying it expects record revenue in the fourth quarter. So you can see those shares taking flight of 3% right now. We got breaking news out of Watkinson, our Eamon, Javvers. has the story. Amen. John, that's right. The Treasury Department just announcing significant new sanctions on Russia and a press release that was just posted. The Secretary of the Treasury is announcing sanctions on the Russian oil companies. Rosneft and Luke Oil also designated are about 30

different subsidiaries of each of those two companies. Obviously a major escalation of the sanctions between the United States and Russia. Talked to a senior White House official about this decision a short time ago. The official said that the president leads by instinct and the president felt it was the right time to move forward with these sanctions. Obviously, it is connected to the falling through of that meeting between Vladimir Putin and President Trump. President Trump had been looking forward to a meeting with Vladimir Putin. That meeting now has fallen through. And as a result of that, you see the U.S. side taking this action to move forward with these sanctions. The senior White House official saying that the president wants to see

results in this relationship. And the president is hopeful that there can be a productive meeting between the two men at some point in the future, not clear when that would happen. Clearly, President Trump here is frustrated with a lack of progress in coming to a peace deal between Russia and Ukraine over the war there. And this set of sanctions now is the next step up the escalation ladder as the president tries to bring some kind of control to that situation, guys. Back over to you. Yeah. I mean, I feel like this is. been percolating for a while, or at least the possibility of it floated out there for a while. This takes me back to the conversation we had with Bill Browder from Hermitage Capital just

yesterday on this show, Amen. And that is how productive and effective can sanctions like this be when energy is still so much of the crux of how Russia is generating income right now? Yeah, I mean, one of the things that President Trump has said again and again is that he feels that the price of oil is really going to affect Vladimir Putin's mindset. that if the price of oil hits a certain point, Russia simply won't have the economic initiative to be able to continue its war. Whether this, to your point, Morgan, whether this set of sanctions will do the trick or not, you know, certainly not clear from where I stand, but clearly an attempt by the U.S. side to fire a shot across the bow of Moscow and get their attention.

All right. Amy Chavours, thank you. Up next, Mike Santoli looks at the sell-off in the recently red-hot independent power sector, whether it's a warning sign for the momentum trade. And we're watching shares of Moderna after hours. The stock falling after saying it will discontinue development of an experimental vaccine to prevent a virus that is a common cause of birth defects. That's after failing to meet the main goal in a late stage trial. Those shares are down three and a half percent right now. Stay with us. Welcome back to overtime. Let's take a look at some overtime earnings movers. Tesla now down a bit more than it was before, close to 2% here in overtime. IBM down

4%. That's off of the lows of the session so far after reporting software results that were a little soft on Red Hat. Southwest Airlines up nearly 3% Las Vegas Sands doing the best of the bunch, up five and a half, Morgan. All right, rolling the dice. Well, let's get you set up with tomorrow's trade today. It'll be another huge day of earnings. Honeywell, Auto Nation, American Airlines, Mobile and Hasbro are going to be reporting before the bell. And then right here on overtime, we will break down results from Intel, Ford, Norfolk Southern, Decker Outdoors, and Newmont. Well, after leading the charge higher, the momentum trade is showing signs of strain with this week's reversal, putting the rally to the test. Senior market commentator Mike Santoli back

with us with more. Mike. Yeah, John, and just to frame out exactly where the momentum segment of the market is coming from with this latest pullback. This is a two-year turn. of the I shares momentum factor ETF relative to the S&P 500. So this is essentially the outperformance that it had built up over the course of several months. So we're down to these levels that sort of match the highs from the very early part of this year. Worth a reminder, February of this year, we came into the year pretty hot, and we saw this rolling over of the momentum factor. A lot of the crowded positioning got flushed out,

and we did see the first kind of near correction in the S&P 500, And then that sort of gave way to all the anxiety ahead of Liberation Day. So those were kind of two separate or interrelated kind of dynamics that were pressuring the market. Then so far right now, it just seems like it's a kind of a jagged rotation coming out of the momentum sector. Another way to view this, the independent power producer segment of the S&P 500, this is this blue line here compared to utilities, basic old utilities. Again, a two-year chart, you see a few times this is the sector that, you know, has the upstart nuclear and a lot. of AI-related power companies, again, rolled over, giving back some outperformance, but still with a lot of air under it relative to the standard utility sector. Finally, ETF FPX, which

tracks recent IPOs, along with IWC, which is microcap stocks. And, you know, they look pretty similar, as you can see over six months. So again, rolling over, but not yet really compromising the underlying trend. So just hot money flows out of these areas. Everyone like me has been talking about how we had some froth pockets in the market. They're getting drained at the moment. So we'll see if those erratic flows disturb other parts of the market or if it's just going to be, you know, kind of reloading for the rally. Mike, we've got a dip buying culture in this bull market. And we've often talked about it in terms of the mega cap tech stocks. But how does that compare with what you just showed us? I think it's related. I mean, I think it's essentially

every time you've had one of these severe breaks, if it did not coincide with a lot of macro stress in the market or when the Fed was raising rates in 2022 into 2023, you've tended to have people migrate back to them. Now, there's a lot of individual stocks, though, that just kind of break and stay broken. You know, it's ironic, you know, some of the meme stocks to the upside today and yesterday, like Beyond Meat and, you know, 1,800 flower. I mean, they were phenomenons back a few years ago, and they were sort of left for dead and neglected. And another cohort comes around to capture the fancy of some of the more aggressive traders. So I think it's all kind of related. You're playing with house money. The market's up for three years in a row.

You've been rewarded for buying into weakness for a while. The last time you do it before the cycle turns, it's not going to be profitable. Nobody knows which is that break. All right. Mike Santoli. Thank you. I certainly want to watch here. John, especially as BTIG, as Jonathan Krinsky pointed out in his note where he was talking about this unwind, this beta break and what we're seeing with the meme trades, that for the S&P, it's gone 121 trading days without touching its 50-day moving average. It's the third longest streak since 1990, which, again, speaks to, I think, what Mike was saying as well in terms of what we're seeing with investor sentiment in this market. Yeah, interesting. And along those lines, we've had two highly valued names, Netflix and IBM reporting. Just in overtime over the past couple days, Netflix hit hard down 10% today. IBM getting hit a bit down nearly five.

We'll see how they, on weather, they recover. Yeah, earnings is really center stage here for the markets too. Government shutdown continues. We've started the fourth week of that. That does it for us here at overtime. Fast money starts now.