Power Lunch - $10 Trillion Bull Fight, U.S. Open Winner Bryson DeChambeau 6/17/24

Episode Date: June 17, 2024

Forget the “Magnificent 7” – right now, it’s all about the ‘Big 3’: Apple, Microsoft and Nvidia. They represent nearly $10 trillion market value combined, nearly 25% of the entire S&P 500. But which of these 3 stocks is best positioned to reach $4 trillion and beyond? We’ve got 3 market bulls standing by to make their case. Plus, Bryson DeChambeau pulled off a dramatic victory at this weekend’s U.S. Open. He’ll join us to talk about his win, the current state of golf and more.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Good afternoon, everybody, and welcome to Power Lunch alongside Kelly Evans. I'm Tyler Matheson. Glad you could join us. Forget the Magnificent Seven. Right now, it's all about the big three. You got Apple, Microsoft, and Nvidia, nearly $10 trillion worth of market cap right there, nearly a quarter of the total S&P 500. So which of these three is best positioned from here to get to $4 trillion, maybe beyond? We've got three bulls standing by to make their case. Excited to hear that. Plus, we've got Bryson DeChambo. He pulled off a drivet. victory in the U.S. Open thanks to two very difficult shots on the final hole. He'll join us to talk about his victory and the current state of golf. First, let's get a check on markets,

though, with the S&P hitting new highs today. And Dom pointed out last hour, and it's worth repeating the semiconductors are breaking out to new highs again today. Traditionally, a leading indicator, the NASDAQ up more than 1 percent. Even the Dow has erased its earlier losses. Shares of Adobe are lower, though, after the company and its executives were hit with an FTC complaint. It accuses them of hiding fees and preventing consumers from easily can. canceling subscriptions. The company says they will fight those accusations in court. All right. Let's begin with those three stocks that we mentioned at the top there, dominating the market and attention and dollars invested. Apple is the current market cap king

at a little more than $3.3 trillion. Microsoft and Nvidia trailing very close behind. Could be a change by the end of the day, for goodness sakes. So what are the markets, what are these market leaders, which one is best to bet to get to full? $4 trillion first and to lead the markets beyond. We've got three bulls to make their cases for the one name they're most bullish on now, making the bull case for Apple. We've got Gil Luria, senior software analyst for D.A. Davidson making the case for Microsoft is Joel Fishbine of Truist. His $600 price target is the highest on the street for that stock. And making the bull case for NVIDIA is Chris Rowland. He is a senior semiconductor analyst with Susquehanna. Let me begin with you, Mr. Lurie.

in let you take it away. Apple made a lot of news last week, closed at some record highs. Why do you think that the wind is so much at Apple's back right now? Because it hasn't been. Within a year, most generative AI will be done on an Apple device and Apple chips. They introduced compelling features and functionality that's not backward compatible, which is going to drive an iPhone upgrade cycle. The stock works. when you have iPhone upgrade cycles, the last time the stock worked was iPhone 12, and we're just getting started in terms of that outperformance.

So there's still a lot of runway because this feature of functional is going to be rolled out broadly, and General of AI is going to go from hundreds of millions of users to billions of users because of Apple. And I'll set up your other guests by saying, they can't both be right. Because if Chris's numbers for Nvidia for 2026 are right, Joel's numbers for margins for Microsoft are probably five percentage points too high.

Apple doesn't have to deal with all that. Well, I was going to ask you something different there, Gil, but let me turn to Joel and Chris and get you both to respond to what Gil just provocatively laid on the table. Joel, go ahead. So, Gil, that was a great argument. But as you know, Apple is very consumer-centric, and where the real money is going to be made here is in the enterprise, Microsoft has 53,000 customers that are using their Azure AI platform right now and are paying for this service right now. And we think this is on a $4 billion run rate, and it's going to be maybe a $14, $15 billion run rate by the end of next year.

That's where the real profits are going to be made in this industry, and that's going to drive this stock a lot higher. Chris, why don't you respond to Gill's challenge there that both you and Joel cannot both be right at the same time. You're, you're defending Nvidia in this, in this cat fight. Sure. And I think we can all be right. In the end, the processing, the true processing from AI won't be on device unless you're talking about some cartoon emojis. If you want real, real performance, it's going to have to be done on data center hardware through the likes of, for example, Open AI. But OpenAI is only one player in what will be many, and the application layer has not been decided. The hardware layer has, and everyone is coalescing around NVIDIA. Gil, he says you can all be right. Well, first of all,

the models are getting smaller so fast that I'd argue that, again, by the time we're talking about this next year, almost all-infrancing is going to be done on device. And then in terms of the usage at Microsoft, it's Microsoft customers that matter. The fact that Microsoft can sell capacity on Azure doesn't mean anything unless their customers generate revenue based on AI, and they are not. There's probably single-digit billion dollars of revenue from AI applications right now, in spite of the fact that Microsoft, Amazon, and Google have spent close to $60 billion on Nvidia chips this last year. For that spent to be sustainable, Microsoft's customers are going to have to generate more than $100 billion of incremental annual revenue

this year or next year in order to justify that spend. And since Microsoft is continuing to spend, they're going to have to generate another $100 billion of incremental revenue the year after that. Until that happens, there won't be an incentive for Microsoft, Amazon, and Google to continue to spend on these data centers. Because if they do, again, Microsoft's margins will shrink by, five percentage points, 500 basis points, that's not sustainable. Joel, so how would you answer that?

It's simple that Gil presumes that Nvidia is going to be the only chipmaker in the world. Exactly. And number one, number two is that this is a cyclical business, right? It's a supply and demand business. They're not an infinite amount of demand that's going to be out there. Microsoft has the best buying power out there out of anyone, number one. Number two is they have 1.2 billion users of Microsoft Office 365. All of those users right now, I think 20% of the Fortune 500 are actually using AI on this

and paying a premium for that service. I think that's going to be pervasive in the enterprise, and that's where the money's going to. Joel, is there any way in which you and Chris can gang up on Gill and say, because it's amazing how, and it's true, he's painted this as Microsoft and Nvidia cannot both reach $4 trillion and the next. year. Something has to give it. If Nvidia hits those numbers, it comes at Microsoft's profit. If Microsoft hits those numbers, then they're doing it at Nvidia's expense because they're using other chips. Is there any way in which he's wrong about Apple sitting in the catbird seat here? In the near term, I'm in line with Chris's position. I think they all win here in the near term.

I think this is a multi-decade opportunity. Right now, it's the Wild West. Everybody's building these huge models right now. Models are getting smaller. Apple's going to have a very successful rollout probably of the next generation of iPhones, iPads, and devices that are going to handle some of these models. And I think Chris is right that Nvidia has a massive amount of pricing power right now and is the go-to player in the GPP space. So Chris, let me turn to you and because I know you wanted to jump in there and get an answer and I'm going to let you do that. But I also would like you to answer the question that I believe Gil mentioned at the top And that is how deep or wide is the moat that Nvidia has in this space?

I mean, they can't be as dominant as they are forever and ever and ever. Somebody else will come in and nibble at their heels. The first point, I'd like to make three points. The first point is models are not getting smaller. They're getting larger. In fact, chat GPT-5 is going to have trillion. of parameters and require 32 GPUs just to load one instance into memory. So these models are not getting smaller.

They are getting larger. Broadcom is talking about a million connected GPUs to fire up a model. That's the first point that I would make. The second point is Microsoft will 10x or perhaps 20x the amount of users on co-pilot and on AI. That is their opportunity, and that is how they can win. And then in terms of Nvidia, it's not the Nvidia hardware per se that is locked in here. It is CUDA. And think of CUDA as the operating system, just as Windows is the operating system for the PC.

Kuda is the operating for large language model processing and or training as of right now. Now, inferencing might fragment in the future, but large model training is that die has been cast, and it is CUDA, and it belongs to Envidia. That's like going back decades when it really was two different computer languages, the language that Apple spoke and the language that Microsoft spoke. Is that a basic sort of correlate to what's going on, Chris? Yeah. Yeah, that's fair. But, you know, PC was really on the back. of innovation at Microsoft and also the community that was created around that. And that is exactly what's happening with AI, with NVIDIA, with Kuda today. So, Gil, let me come back to you because you began the conversation talking about how

this new AI-driven software that will be in the next generation of iPhones is not backward compatible, meaning you can't load it onto your old iPhone. You got to go out and buy a new one. What is going to be so compelling about this that I'm going to get off my fanny and go out and spend $1,200 for a new iPhone? What is it going to enable me to do? And I'm not just talking about sharper pictures or photographic effects. That's really going to be the compelling use case. Well, everything you've gotten excited about generative AI this last 18 months, you'll be able to do on an Apple device, but it'll be integrated into the experience.

You won't have to go to the side for a co-pilot or Chad GPT or Gemini within your experience, within your text messages, within your emails, within your photo editing. All these magical capabilities are going to appear, auto-complete, autocorrect, summarize. All the stuff that we've talked about for generative AI is going to be able to be done on an Apple device. And oh, by the way, it's because the models we're going to use are going to be 3 billion parameter models because those are the models that are efficient, fast, easy to develop and customize, the frontier models with five trillion parameters are going to be the purvey of only a very small number of companies, probably two or three companies,

OpenAI, Google, maybe meta, and they'll only be for the most cutting-edge uses. Everything we're going to use, including in the enterprise, is going to be a small language model that's going to be on device, whether an Apple device or, by the way, a PC device. Microsoft just introduced the PCs that do AI. It'll be done there. A vast majority of inferencing will be done there. The largest language models will only be frontier models to handle the most complex tasks. And only those will really reside in a data center.

Chris, what about the three companies we haven't mentioned in this race to $4 trillion, Amazon, alphabet and meta? Amazon, the AI strategy is a little less clear. It's unclear how AWS, and, you know, they'll be able to provide commodity GPU compute to people, but beyond that, we're finding AI applications a little less clear. Meta will, similar to Apple, have AI experiences that they'll be able to integrate into their program here. And I'm sorry, the last one was. And meta, I believe. No, sorry, that was, Matt. Alphabet, Amazon, and meta, yeah.

So alphabet is this search functionality is essentially going to be driven on the back of AI. So this is the biggest defensive move that Google can do to maintain their monopoly, near monopoly, and search. You know, Joel, the thing I notice about Microsoft is it's just incredible scale in so many different. parts of this universe. 1.3 billion devices using Windows 10. Over 1.2 billion users of Microsoft Office. 756 million users of LinkedIn. 145 million active teams users daily.

That is the kind of mass and scale that seems to me would give. It feels to me in a way like it's Microsoft's ballgame lose. 100%. And that's why Sautja and the Microsoft Microsoft team have invested so much money in the space. I think Gil makes a good point. They are spending a tremendous amount of money on CapEx, but this is in front of the storm. And they're going

to build so much of a platform that is going to be impenetrable because they have the eyeballs that are going to be actually using the AI at the end of the day. The only other pushback that would give you on Gil's comment would be that, you know, he talked about AI models, you know, working on an iPhone, which are great. I'm not sure that the battery capacity can handle the compute capacity that's necessary in order to do the compute that he's talking about at this time. You know what I'd like to do, guys? This has been a fascinating conversation. I would like all three of you guys to promise to come back in six months and we'll repeat this. Is that sound like something you do? Sounds great. Absolutely. That sounds cool.

Yes, sir. I'll give you one more claim six months from now. All of the big cloud guys that we talked about will raise capbacks to accommodate more GPU purchases over the next six months than right now. November 17th. November 17th, we'll see on November 17th, guys. Thank you so much, Gil, Joel, Chris, appreciate it. Thank you. That was great. Thank you.

Coming up, the record rally that few are enjoying. Investors in general seem to be having trouble embracing the strength given this extreme narrowness and mega cap dominance that we were just discussing. We'll talk about the market fallout next. All right, welcome back to Power Launch, everybody. We just talked about the three big behemoths that have been dominating the stock market, Microsoft, Apple, and Nvidia. And for those stocks, it's the best of times. But for the other 497 S&P 500 stocks, it's maybe a little closer to the worst of times. Let's bring in Mike Santoli to explain.

Really, the worst, Mike? I would say just on a relative basis, they've been left behind. I mean, the median stock in the S&P 500 is up a couple, 3% on a year-to-day basis. But the separation between a relative handful of anointed winners and the rest of the market, especially smaller stocks, has been pretty stark. I would say today it's a little bit of a broader rally to the upside. But even here, you have the equal-weighted version of the S&P lagging the headline mega-cap-driven version by, I don't know, almost half a percentage point. I think the question one might ask is, why is everybody complaining so much about this? In other words, what is the objection?

Why does it make people uncomfortable? For one, it makes the S&P 500 extremely difficult to beat or even keep up with if you're an active stock picker. I understand if you're a professional fund manager, it's tough to watch this happen this way. You'd never construct a portfolio as concentrated as the S&P is right now. If you're an index investor, passive, you say, great, except now, I don't know, maybe a third of my investment is somewhat driven by this hot AI theme, and that's how it moves on a day-to-day basis. I think the key is sometimes when you have very weak breath in a market that's, been making new highs, the breath catches up. And they've been sort of resting the majority of

stocks over the last several weeks, perhaps. And as long as you do have that visibility toward benign yield, soft landing scenario, you would think you might have them find their footing. The other piece of it is it's sort of maybe a source of instability if you have those big stocks get more and more overbought and make the overall index a little more fragile to a short-term shock. I wish there was a way to tell one from the other in advance. You know, we're going to talk more about this, Mike, but just based on your experience of the 90s, I don't know if you heard what we were talking about earlier with Rich Bernstein, you know, is this going to be a moment where people say, oh, I piled in just at the top and it's all going to crash and the leadership's too narrow and, you know, this is all frothed and there's no real sense to it.

It doesn't feel like a really close comp in all respects, mostly because, as I always say, there were 500 IPOs in 1999 and they almost all. on average doubled in the first day. We don't have that right now. What we have right now is a market that views defensiveness, quality, earnings momentum, and strong balance sheet as all the same thing because they're in the same stocks right now. So it's really following the path of longer-term earnings expectations. I know you could have said that about Cisco in 99 or 2000, but you're not yet paying as much today as you were then for Cisco.

The only quick follow-up I would say to that is, is the IPO data relevant? because if the argument around AI is that it's only going to benefit the platform incumbents, then people say, I don't even need a startup. I'm not going to make the big money on a startup. I'm just going to stick with the three biggest horses in the market or whatever. It may not be relevant in the sense of kind of forgiving the concentration or forgiving the valuations being assigned to the top stocks. What I do think, though, is it creates less of a sense of, hey, this is an easy game. And we all should be playing it as aggressively as possible because that's what you felt like in the 90s.

If anything, right now, I see almost the complaints about over-concentration as generating its own wall of worry. And that's always a good thing for the market because people are not comfortable to just take on a huge amount of new risk. That's a great point. Stay right there. Mike, we want to bring in our next guest who says excessive valuations could still leave room for disappointment, and he's looking to consumer staples, healthcare industrials. Jason Pride is Chief of Investment Strategy and Research at Glenmeet. Boo, Jason. Don't spoil the party here.

We're all, we love it. The MAGFAB5, whatever you. you want to call it. You're not, you're not a believer in that story. Look, it's more about controlling the risks than having an investment discipline. If we want to invest, we need to take advantage of valuations where they do exist. And quite, you know, right now, those valuations, you know, I think Mike pointed it out, they are expensive in those areas. Are they at the absolute peak that we saw in 1999? No, it's probably about two-thirds of the way they are by our measures. But if you look across the broad market, there are a ton of opportunities to get decent growth at a reasonable valuations, good profitability, good investments for a longer-term time frame.

So we'd recommend that investors take an approach of if you have the winners. Great. That's wonderful that you have them. Pair back some of those winners back to more reasonable levels. Put your money into the rest of the market, parts of the market that have similar profitability growth stories that you can actually. get behind and own over a longer time frame and be a little bit more comfortable with the valuation. That doesn't mean you don't own. Let's go to what used to be called. Jason, these stocks used to be called GARP, right? Growth at the right price is what you're talking about. Where are they? Look, you can find things like that in health care and consumer staples

and industrials within the large cap space. If you go outside the large cap space, I think there's a lot of opportunity in smaller capitalization stocks. You get much. more reasonable valuations. And if you actually are willing to, you can go abroad. There are some very interesting opportunities abroad, even ones that attach to the AI theme, particularly within Japan. Japan is a market that even today is still undervalued, is driving earnings higher, has that profitability behind it, and is trading in more reasonable valuations. Let's talk a little bit about small caps, because people have been talking about them being poised to move and that there's opportunity there. And I have no doubt that.

there is. There are a lot of them. But why haven't they been able to get any traction here? And what do you think a catalyst is going to be to make that happen other than just, well, it's been a long time and then suddenly a light goes off and people start to buy them? Look, I think part of it, part of it is that small cases is kind of a catch-all sort of category characterization. There are about 3,000 stocks in that category that span everything from very unprofitable companies to good, profitable solid businesses that are just smaller market capitalization. Many of those businesses, on average, have a little bit of debt, and I think we've been going through a cycle here where because of the floating rate nature of the debt that they have on their balance sheets, they've actually

been facing an earnings headwind. That is changing as we go into 2024 and is going to be changing materially in the back half of this year to the point where earnings growth from small-cap stocks will likely surpass that of large-cap stocks. and perk the interests of investors. Small caps came up as well last hour. Mike, what do you make of the arguments for looking there that we could have a massive leadership change la 99 to post.com? Well, what happened from 99 into post.com was the dot com crash.

I just don't think that those types of transitions necessarily happen on the fly. If there were a way to look back at an example when that did work, it would be 94 into 95. And what did that mean? That meant a slow and orderly fed easing cycle. after an internal correction in the broad stock market that hurts small caps a lot. And when investors got confidence that the Fed was able to ease into an expansion,

that's a lot has to go right. I think the one thing I always would draw out of the recent action is that we shouldn't assign small caps any special prescience about the macro. We don't have to say, oh, well, Russell's not performing, must be bad for the economy. I mean, it's been years now. The economy's been fine, and the Russell 2000 has been dead money. Indeed, we'll leave it there. Mike Santoli, Jason Pride. Thank you both.

And further ahead, heat waves on the way. Drought alerts climbing. Acts as simple as mowing your lawn can lead to significant ways. I was going to mow my lawn this afternoon. We're going to take a look at one company solving the problem in today's clean start. Welcome back to Power Launch. A quick check now on the NASDAQ. It is up by 219 points, a 1.24%.

17,908, getting very close to. 18,000. Another record high here on pace for a six-session winning streak. Chip stocks leading the way, Broadcom and Micron among the biggest gainers there. Meanwhile, natural gas falling once again today, even as a heat wave is predicted. Pippa Stevens joins us now to explain. So the market got a little bit ahead of itself last week. And basically over the weekend, the weather forecast were revised. And so we still are expecting record heat, but it's not supposed to be as much of a record as previously expected. prices had run up and they had, you know, top $3 and hit a five-month high. And so it's come down a little bit.

Now, Henry Hub, that's what you see on your screen right there. That is the regional benchmark down south. But we do have to remember there are different regional prices. And so what we've seen is that in the Mid-Atlantic and in New England prices have risen because that is where that heat wave is supposed to take over. And then also Eli Rubin over at EBW Analytics noted that we've seen production come back in the Marcellus Shale region. That's part of Appalachia.

and that's because we are coming off of this unique period where demand was really weak. And so some of that production was sidelined. And so that's coming back online. But the question is, if we have these record temps all throughout the summer, if that's no longer an easy fix, could that be more supportive? We still have that record inventory levels, though, you know, about 25% above the five-year high. Moving over to oil, that is higher today on a little bit more optimistic demand projections. I did want to note that we saw over the weekend some attacks on vessels in the Red Sea,

and that still does impact oil prices. You see there so far this year flows through the, sorry, I should say, flows around the Cape of Good Hope have risen about 50% for oil and oil products compared to last year to avoid that region. I'm just glad to hear it's going to be 97 instead of 98.

You know what? It's all going to be fine. You probably don't notice, but the Nat gas, the utilities notice. They certainly do, I bet. But thanks very much. Thanks. Let's get to Simomodi now for a CNBC News Update.

Seema. Kelly, Elon, Mollinger. Musk is relaunching his fight to claim his record multi-billion dollar pay package after shareholders voted last week to reaffirm it. Now, in a letter to the Delaware judge in charge of the case made public today, Musk's lawyers say the recent vote, quote, significantly impacts her ruling that originally avoided the pay. An attorney for shareholders who oppose the pay says the vote has no legal effect and is expected to explain the argument in a brief due Friday.

And as the war rages in Ukraine, Russian President Vladimir Putin fired four deputy defense ministers today, replacing one of them with a relative. It's the latest reshuffle in the military ranks after he removed long-serving defense minister Sergei Shugu in May. Putin has fired five other deputy ministers in the last few months, all of whom have been arrested and charged with taking bribes. And an online personalized vitamin company Karev announced it will cancel all subscriptions as of today and no longer accept new orders.

But the company did not close the door on a return. saying it is exploring options for the brand, but does not have anything definitive to share right now. Kelly? Seema, thank you very much, Sima Modi. After the break, we'll talk about Best Buy's big year. It's up about 20% since January. Getting an upgrade to buy at UBS today. We'll trade it, that one, and others in three-stock lunch.

Welcome back. Time for today's three-stock lunch. With our trades, Malcolm Etheridge is CIC wealth executive vice president and a CNBC contributor. Malcolm, welcome to you. And we want to start with Dell Technologies today, which is soaring as Morgan Stanley reiterates it as a top pick after management meetings. The shares are up 6.5% now. What do you do with the stock? Yeah, Kelly, good to see you. I consider Dell to be a buy here. I know that shares are already on the move, but I think, you know, expectations just got way too high for this company, right?

But the share price tripling in about a year. But I definitely think Dell has found their place in the AI conversation by embedding some of the newer AI features into, many of their hardware devices. And so I think Apple even validated that model at WWDC, right? So following the 30% sell-off that came from the most recent earnings called because of that sell-off, I guess I should say. I think the shares have gone from overvalued to now having created a buying opportunity for Dell shareholders. All right. Up next, we got Best Buy. We mentioned it a moment ago. Shares are higher following an upgrade to a buy from neutral at UBS, saying new products and an appliance upgrade cycle could strengthen the stock. What's your trade on Best Buy?

Yeah, Tyler, you kind of took the words out of my mouth, right? It's kind of, I consider Best Buy a and it's kind of a continuation of that Dell story in some ways. The consumer electronics market is due for a complete refresh soon because of people who are looking to replace devices they bought during the COVID boom that maybe they weren't able to buy exactly what they were looking for at the moment. They just had to buy what they could find. Plus, you couple that with the fact, that folks are looking to get their hands on the newest and greatest AI innovations. So I think Best Buy is poised to benefit from some of that demand. The one question their management team is going to need the answer going forward

is just how long it will take for AI to make the jump from being an enterprise-focused technology to a consumer-facing one. But if they can make a compelling enough case, I think shareholders will reward them long-term. So this is a buy for you? Yeah. Okay, got it. Sticking with it. Let's get to Union Pacific.

then they just got a downgrade. We don't talk about the rails that much. They're at a hold from a buy at loop capital. The shares are down on the year by 9%. Would you be a buyer here? I would actually consider this one a hold. I think this company is still in recovery mode, right, with regard to the struggles they had last year. And the jury's still out on whether the new CEO will be able to deliver. But for current shareholders, I think it's probably worth hanging in there for a little bit just to see if some of the tailwinds their competitors have been touting can actually material. They're bragging about their ability to add a little bit of cost, pad the stats a little bit on the operating margin side with energy prices being what they are and they can add a little bit to the customer's bills for energy surcharges. Plus, you know, Norfolk Southern, for example, is pivoted into what they were considering truck-only markets once upon a time and now they're picking up some of those shorter routes. So I would imagine Union Pacific, excuse me, wants to follow in those same footsteps. There just hasn't been a lot of talk about it just yet. So I would say it's a wait and see. All right, a wait and see on Union Pacific.

Malcolm makes for joining us and for all of those traits today. All right. We've got some news out on Apple right now. Steve Kovac has it. Steve. Hey there, Tyler. Yeah, Apple is killing. It's by now pay later product.

This is Apple Pay Later. It was launched just a little over a year ago, actually, back in March of 2023. And just like a firm and Klarna and so many others, it lets you through Apple Pay, make interest-free payments towards products. We see Affirm. It was negative. It went positive when this news hit. Now it's down about a percent again. And I would just note affirm also last week at the developers conference at Apple out there in Cupertino.

It was mentioned as a partner to allow its buy now pay later service within Apple Pay. So it seems like Apple's kind of offloading a lot of that to third parties instead of doing itself. By the way, Apple was funding its own Buy Now Pay Later just out of its own cash pile. So that was kind of an interesting move there, too, but it looks like no more Apple pay later now on U.S. phone starting now. If you do have a loan, they do say you can start paying that off. You can continue to pay that off, but the feature is going to go away for everyone pretty soon here, guys. Do you know why, Steve? They weren't saying why.

There's no reason why other than they're just really highlighting the fact that they opened up more ability for these third-party partners to come in. That also includes some banks and so forth. But a firm is the big partner there. All right. All right. Brison DeCambeau. Thank you, Steve. Bryceon DeCambeau winning his second U.S. Open Open dramatic fashion.

We're going to speak to the golf superstar about that and more when Power Lunch comes back. It was a thrilling U.S. Open finish on Sunday Father's Day as Bryson DeCambeau overtook Rory McElroy by one shot to capture his second U.S. Open title. Bryce DeCambeau joins us live. Bryson, welcome and congratulations on one of the most compelling rounds of golf that I have ever seen. It really was truly amazing. A lot of people are going to remember it as the Open McElroy lost. I call it the Open Deschambeau won.

And you won it despite, hey man, you did not hit many fairways, did you on Sunday? You were scrambling all day. I was. Thank you for having me on. It's a pleasure. I can tell you that I was hitting good all week two with my driver. I striped my irons, hit it really well. But that last round, I just couldn't get in the fairway for some reason.

and my iron play was beautiful, though. Wedge game was awesome. Putted it well. And Rory, man, he was fighting for every shot. And, you know, unfortunately for him, he didn't make the puts. It was kind of like a match play down the stretch here. But here is this shot on 18. You had an impossible lie.

You were underneath a tree branch. You hit it into the trap. You had a 55 foot shot from the trap that I'm told had about a 2% chance. And here's your shot. About a 2% chance of getting a 2% chance of getting. as close as you put it. How'd you do it? Oh, it's been a lot of practice. I actually practiced a lot of bunker shots growing up from 50 yards. Certainly didn't expect to have that to win a major championship. But when my caddy and I got to

that lie, he told me, Bryson, you've done harder shots before. You can do this. But never a better one. That's true. It's my best shot, the best shot of my life. Bryson, you'd be able to, not that you're doing, not that you're doing these amazing things to, you know, just get endorsement deals. But listen, there's so many fans who want to see you as part of the traditional old PGA. I mean, what do you tell them? They say, we don't like this rift at the heart of Gulf. Come back and let us adore you. What do you say?

Hopefully this bridges the gap a little bit. It's unfortunate, the landscape that it is. Obviously, being a part of live, I understand people's perspectives. I have respect for it. but I hope that this transforms the ideals and the narratives that have gone on in the past, and we're now in a place where we can start to heal and hopefully come back together. I know that they're in talks, and I hope this great game comes back together a lot quicker than, you know, it's been, and it's taken too long, and it is what it is.

This was the second major that you, I was watching with your friend Reed Dickens, the PGA, where you almost pulled that one off. This was your second one. As you were standing over that three and a half four foot put, putt, what goes through your head there. I've done this before. I've hit this put thousands of times. It's a right center put, just knocking a four-footer. And that's it. And you did it with confidence and pace and the celebration was awesome, man. Congratulations, Bryson.

Appreciate it. Thank you. Thank you. Thank you. Coming up, let's test the water, shall we? We will highlight a startup that's revolutionizing, oh yes, lawn sprinklers to cut down on wasted H-2O. This is a big deal in my town. Diana Olik is going to tell us about it. Power lunch is back in two. Welcome back, everybody. Summer's here.

As you know, temperatures are climbing. You're probably watering your lawn a little bit more, but traditional sprinklers are anything but accurate, leading to significant waste. But what if there were a better way? Diana Oleg joins us now with the latest in her continuing series on climate startups. Hi, Dai.

Hey, Ty. Yeah, climate change is accelerating both water scarcity and drought, and as a result, water prices are going up dramatic. Landscape irrigation uses about 9 billion gallons of water per day and about half of that goes to waste. Precisely why it's time for a smarter sprinkler. You see it all the time. The sprinklers are watering the lawn, but also watering the driveway and the sidewalk. Whatever the system, it's generally not very accurate. But new technology from companies like Rain Bird, Ratchio, and Minnesota-based Irrigine are changing that. Erigreen likens its system to the precision of an inkjet printer.

It's a digital robotic sprinkler that pops up in the middle of the lawn, and it basically traces the contours of your landscaping, and it's putting down a completely even layer of water. Dyer claims the single head system saves about half the water typically used, but it's not just the precision. Of course, there is AI involved. We use the cloud data and information we have about your soil and what kind of crop you're growing, like what type of.

of grass, like cool weather grass or warm weather grass, how much shade and sun you have, so that we can design patterns that follow the weather so that every single zone in your house gets an individualized watering pattern. And it's not watering when it's raining. All of this is controlled by an app, kind of like a video game, moving the sprinkler head to water around corners and in patterns. The company has already installed a few thousand systems across the country and is expanding quickly, which is a big draw for investors like...

Ulu Ventures. It was an extraordinary market opportunity. There are 80 million lawns in the United States. And this is an innovative technology that not only saves money, but dramatically reduces the amount of water a consumer uses. In addition to Ulu Ventures, IroGree is backed by Sage Hill investors, Burnt Island Ventures, MFV partners and some ventures. Total funding to date $15 million.

Now, IroGreen says it has already saved about 200 million. 200 million gallons of water in the systems it's installed so far. It also has a tool on its website where consumers can type in their address and see how much water they're wasting. And they do that using, of course, satellite imagery. Kelly. Do you follow me on Instagram, Diana? All spring long, I've been trying to save water, mow the lawn myself and less often, this whole thing, right? And it's very difficult. It's very difficult. These grass lawns, they're costly. They have a lot of run-up. They have a lot of problems that I can't quit it. I don't know how to quit it. I can't do it. And imagine if you lived in California where there were

restrictions, it would be even harder. So you need something that's totally precision. Yeah. How much do you know how much these systems cost? No, I don't, but I'm sure you can find out by going on their website. I'm on the website right now. Exactly. We can put in your address. Get a quote. Diana, thanks very much. As always, for bringing that to us, Diana Oleg. Still to come, playing defense, NFL Commissioner Roger Goodell is taking the stand and the league's Sunday ticket trial. We'll get the latest details. And remember, you can always hear us on our podcast. Just follow and listen to Power Lunch wherever you go. We'll be right back. All right, folks, let's give you a quick check on the markets. As you see there, the Dow Industrial's

up about a half percent or 182 points, 38770. And the trial in the class action lawsuit against the NFL continues today. With the biggest name witnesses yet to take the stand, Julia Borsden is there at the courthouse in Los Angeles and brings us the latest. Hi, Julia. Hey, Kelly, that's right. NFL commissioner Roger Goodell took the stand this morning with as much as $21 billion in damages at stake in this class action lawsuit, alleging that DirecTV's exclusive distribution of Sunday ticket inflated prices for consumers. The commissioner describing Sunday ticket as supplemental and complementary to CBS and Fox's broadcast of Sunday afternoon games. He called it a premium product that's additional content not meant for every fan.

Commissioner Goodell also noting that before Sunday ticket launched back in 1994, which Goodell called an innovation, that there was no way that fans could access all of Sunday to all of those Sunday afternoon games. Now, Goodell stressed that he is focused on reaching as many fans as possible and that the league has recently expanded its fan base from 175 million to 210 million fans. Now, there's one other thing that Gaddell stressed. He noted that the NFL had zero control over DirecTV's pricing of the Sunday ticket package. He said that sometimes DirecTV offered promotions and gave the package away, which the NFL did not like, but that they couldn't do anything about it. So right now, Gadell is being cross-examined by the plaintiff's attorney. And Tyler and Kelly, I have to point out that earlier this morning, the judge admonished the plaintiff's attorney for wasting time in being redacted.

so we'll have to see how it goes this afternoon. Remind me, Julia, because I've frankly forgotten, is DirecTV still a carrier of these games? It is not currently offering Sunday tickets. So DirecTV did offer a Sunday ticket for many years, but currently it's YouTube, which is offering a Sunday ticket. So that sort of distribution right has switched from DirecTV to YouTube, which Commissioner Gaddael explained was because,

DirecTV changed ownership. It was ultimately acquired by AT&T. But that YouTube developed the streaming capabilities. And it was only when YouTube, when they saw that YouTube did have the streaming capabilities for live games, so many people watching it once, did they switch over their distributor? All right, Julia, thanks very much.

Julia Borson reporting from that NFL trial. Thanks for watching Power Lunch, everybody.