Power Lunch - 2024 CNBC Stock Draft 4/25/24

Episode Date: April 25, 2024

The CNBC Stock Draft is our annual stock-picking competition pitting market professionals, athletes and celebrities against each other. Each team makes two picks from a list of 60 stocks and other investments. The winning team’s stocks garner the highest average price appreciation between the closing prices of April 25th, 2024, and Feb. 7th, 2025.   Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

It is time now to get things started with the first overall pick in the 2024 CNBC stock draft. For that, we go over to Brianna Stewart of the New York Liberty, along with her stock picking partner, Karen Feinerman, fast money trader. Brianna, what do the money machines take with the first pick? I feel like I should have an envelope here. With the first pick, we are selecting meta. It's an easy choice for us. And when there's a player like Mark Zuckerberg out there, we want to have him on our team. All right, Karen, what do you think about meta's sell-off today?

Is that one of the reasons that fed into, I mean, maybe it was a close choice between meta and something else, and today's sell-off in meta boosted it to the top pick? Yeah, so it actually is the reason that we chose it. I was not on our list, but we had to sort of make a game-time adjustment because this opportunity presented itself to us. I think that the sell-off is somewhat overdone, considering Mark Zuckerberg's prowess as a CEO, considering the strength of that business. The valuation is not very stretched at all. So we are happy with our first pick. Meta.

All right, that's the first pick. Next up is steady, Eddie, Eddie, George. But Tim, let's get your reaction to that first pick from Brianna and Karen. Some game theory by Karen pointing out that maybe, you know, yesterday or the day before Meta was a name that's outperformed the S&P for very good reason by probably almost 175%. over the last year or so. If you think about what we heard last night, this is a company that was, the year of efficiency may be gone.

In other words, it's a company that talked about higher costs, they downgraded Q1 and Q2 slightly in terms of the top line. And that adds up to a company that's had an enormous outperformance period in markets. Look, if you'd ask investors a month ago, this is one of the safest picks

in the top of the leaderboard. This is a tactical call, I would say, but a great company certainly has proven proof over the last couple of years. fascinating. All right, with the second pick in our draft here in studio is Eddie George, former running back with the Tennessee Titans, now the head coach at Tennessee State University. Steady, Eddie, what is your pick? My second pick for the second pick is NVIDIA.

I really believe in the management team with Jansen. He's done a phenomenal job. The GPU graphics processing unit is the best on the market. They're in high demand. They're leaders in AI, and I'm believing for the long term. You said you don't have enough steam left, but I, I think they're ending for the long term. All right.

That was, you know, next up is our defending champ, WWE superstar Charlotte Flair, who rode Nvidia really to the championship last year. Tim, your thoughts on Eddie's choice. Look, this could be the gift that keeps on giving. This is certainly the five-tool athlete out there. This is where the growth is coming from. At a time when semiconductors have pulled back a little bit,

it hasn't been a one-way ticket. There's been a pull-back across the entire space. If you think about Nvidia, there are people arguing that the growth is compensated by a multiple. This company earns $25 to $30 and $25 and 26. It's 30, 35 times earnings. Not that expensive for a company that's growing their revenues, 150% year over year if you look at some of the recent quarter.

So I think Eddie nailed this one. I think you have no place to not take a company like NVIDI in this draft. You had a little bit of a pullback. I think there's a high delta opportunity. So the first two picks that have gone off the board here, I assume they do not surprise you one bit. They don't surprise me, but when I think about this stock draft and the opportunity you have for one calendar year to get an outsized performance, companies that have outperformed and had a great past 12 months sometimes are not your best call.

It doesn't mean we're talking about fundamentals. We're talking about game theory. The two stocks added up to the best overall score for one of our 10 teams is, I think, how you win this. But you're talking to about a guy who's retired from the playing field and moved to the booth. Yeah, you know, maybe because I wasn't so secure. You were part of this contest. All right, we're up to our defending champion. Now, welcome back, Charlotte Flair.

Thank you so much for being with us. First overall pick last year. She did choose Nvidia, and it helped carry her to victory this time. With the third pick, what does Team Wu select? Welcome back, Charlotte. Good to have you here. Thank you so much for having me. Third pick will be SMCI.

AI is still at the forefront of this technological revolution, and SMCI happens to be a major player. So I'm going to go with SMCI. Anything particular you like about this stock? Well, they just had a big dip, and their PE is at 50%. InVDenVIA was at 31%. And I think that might be something to consider. All right, Charlotte, thank you very much. We'll hear from you with your second pick in a few moments.

Our only other returning contestant this year is the mentalist owes Perlman. Tim, though, let's get first to you, the pick of Charlotte. First of all, I would be scared to go against. anything Charlotte says for a lot of reasons, including she won it last year. And so I think her point is she's picking a company that has a, again, a higher beta element of what they do. You've seen a pullback in semis and some of the AI related plays. And so it's hard to say that a company like this that has crushed it for the last 12 months can't be in the running. Again, I'm a little worried about the higher end, the higher multiple, the growthier part of this leaderboard. All right. There's the sound. It means it's time for our next pick. For that. We go to O's Purpose. Burlman, the mentalists, although he knew that, right? O's nose. Your pick. I did.

What is your pick, O's? Here we go, gang. Fourth pick for me, I feel like in the stock draft, it's all about if you're not first or last, I want big swings, I want an asymmetrical bet. I'm going Bitcoin, everybody. Deep into Bitcoin. What do you see there, Oze? I mean, I know you know the future.

Go ahead. We'll see, but I see six figures easily. I think it's a play where there's a huge upside. And like I said, I'm not going for second or third. I'm going for first. The year I was with Tim, head to head, Bitcoin almost brought me to the lead. But it's all about timing the market. And I think it's a surefire bet Bitcoin is going to six figures.

It's not a matter of if but when. And I don't want safe plays. So I think that that's the way to go for it. And you want to kind of go for something that has that big upside. And I think that within the commodity space and alternative assets, Bitcoin is that. Here's another one. Tim, thanks O's by the way. Here's another one, Tim, that has had a big run-up in the past year. It's up 51%. First of all, O's knows to the penny how much money's in my pocket right now.

But isn't it ironic that he hasn't won? Well, you know what? That's a good point. Maybe he needs to show that the game is not rigged in his favor. Bitcoin, digital gold, whatever you want to call, it's been an environment where Bitcoin, the reasons for owning Bitcoin have added up to success. If you think that the Fed is at least on the other side of their aggressive Fed policy. There's certainly a lot of questions from central banks around the world as they buy more gold. Diversification away from fiat currencies. You know, the reason for being for Bitcoin is certainly every year in this stock draft,

a reason why this is perennially a top pick. All right, for our next pick, we're going to go down to my hometown of Washington, D.C., a town where Tim spent a lot of time where the commander's new running back. Austin Echler is standing by. Experience is the team name. Welcome to DC. I hope you can bring the commanders good luck. You have been a top pick in more fantasy drafts than you probably know, but now it's your turn to choose. What's your pick? Yes, thanks for having me on first of all. And I would like to say my first pick is going to be Caterpillar.

Very interesting. Here's a stock, Austin, that has had that stumbled today. I mean, we look at what happened today after the earnings came out. Did it stumble today influence? your decision to choose it today? No, I'm really looking at kind of the landscape of just, you know, the environment of the U.S. right now with, you know, affordable homes and affordable housing really drying up. And it seems like everywhere I go, there's construction on the roads, there's new apartment buildings being built.

And so I think where we're at right now in an environment where there's, there's a deficiency in the supply of homes and infrastructure, especially in the housing department, that Caterpillar is going to have a great couple of months here coming up. Well, you have definitely gone from. from one place where there's a lot of construction on the roads, Los Angeles, to another northern Virginia, where the traffic has gotten about as bad as L.A. I wish you all the best on that. Austin, we'll see you back for pick number two in a minute. But, Tim, your thought on Kat. First of all, the Big Cat reported today, if Austin's being tactical, I'll move lower. A lot of that move today is the volumes

weren't great. Bears are certainly, you know, saying that maybe volume weakness is something that's proceeding some of the economic weakness that, frankly, we haven't seen. Improving margins and an evaluation that make this still a really attractive stock, but it's a stock that's up 90% over the last, you know, calendar year. And it's a stock that also, I think, has had that kind of a run that if we get any slowness in the economy, look, I give awesome credit. He's picking a blue chip company that I think can compete in this environment. All right. We've got so much more ahead. The stock draft will continue next. I'm Bob Bassani at the New York Stock Exchange. Stock's hit today by a double whammy of disappointing

earnings from META and IBM and a weaker than expected GD. report. Stocks were down across the board but are now well off of their lows. At one point, just after the open, the S&P 500 dip below 5,000 down 1.6%. But it's recovered midday, now down only 0.4%. The NASDAQ was down 2% at the open as Meta weighed on that index. Meta is still down about 11%. But it's well off the lows as well. NASDAQ has cut its losses in half as well as Nvidia, Tesla, Netflix, all those stocks are trading up today. The Dow was hit hard by a disappointing earnings from IBM and to some extent by Caterpillar as well, and a sell-off by Microsoft at the open, but it too is well off of the lows. Microsoft, by the way, reports earnings after the

closed today. Big day for IPOs, as data security firm Rubrik had a slam bang open at the New York Stock Exchange, pricing its IPO at $32 that was above the expected range of 28 to 31. Now trading up nearly 15%. Rubrik is the first tech unicorn IPO since last fall. We also had Lorne Holdings, which makes aerospace and defense components. It priced at $28, also above the expected range, now trading up almost a whopping 60%. Tyler, looking good there. Back to you. All right. Thank you very much.

Bob Pisani. Welcome back. We've got a quick change to the program here. We unfortunately have somehow misplaced or lost Kenny the Jet. So this is a nine-person draft. Time now for the sixth pick in the first round. We go back to the podium for Neve Schulman, host of Embron. TV's Catfish new season airing Tuesday, April 30th, less than a week from today.

The Market Fish, that's the team name. What do you select, Neve? I'm very excited to choose Boot Barn for my pick. Oh, and why? You like their boots? You know, I'll tell you why. With climate change, obviously a major factor, inclement weather is on the rise, so we're going to need boots.

And, you know, companies come and go, trends come and go, but feet and hard work. are here to stay. Simple reasoning, we need boots. We need boots. But Neve is wearing a very fashionable pair of sneakers over there today, but we just let that one pass. Maybe he's telling us something. Maybe he's telling us something. Fair weather is coming here. Maybe Neve is, hey, Tim, your thoughts on boot, how much time have you spent researching boot barn? Look, I don't want to get into this, Tyler, because the bottom line is it's been a lot. And it's also clear that there's a lot of people from from California moving to Texas, and maybe, you know, that's, that's, just kidding. I mean, maybe it's not really happening.

But, you know, I look at discretionary spend. I see a company that's, you know, had a very, very big run, also a dynamic here where I look at the charts, and I don't love the pick. I look at the growth. I look at the multiple around 18, 19 times. And I think, you know, Neva is on to something. He's certainly onto something in terms of where I do think that there is a demographic trend. I think young male teens are on this car heart stuff.

I could see you in kind of a car heart jazz. packet, Tyler. I'm much more rugged than I'm here. Well, then we'll put you in a pair of boots, give me a log splitter. Interesting call and clearly a stock that I think could move. Very interesting. That's an interesting thing that you went to, Tyler. Log splitters. Log splitters. That's what I think of, ruggedness. All right. Right now, let's get to you a fitness personality and creator of the fitness app. Jillian Michael, she's getting an assist from her business partner, Giancarlo Cherished. Together, they are the cash crew. So Jillian, what's your pick, please? Okay, well, my first question is I'm kind of laid in this whole lineup here.

So I'm wondering, I'm texting my business partner because he's not on the screen yet to ask him if any of our picks got stolen. So if we lose, I blame everybody else going ahead of us. With that said, I'm going to let G my QB here in to run the play. Gee, who are we picking? So you're absolutely right, Jill. A lot of the teams ahead of us had great choices, but we are going to go with an Audible here and go with Microsoft based off Nancy Pelosi's stock portfolio,

who I don't, I know very well always wins. All right. Well, there you go. That's our logic. It should be interesting because Microsoft reports after the bell today. The stock will be added. So, Jan Karla, are you factoring that on? You're factoring in the big sell-off and technology across the board that we are seeing?

Absolutely. Not only are we factoring that in, but we also like tech companies that have client-facing products and Microsoft's had a real stronghold on the market for decades with their office suite and other products that they have. So we like the lower volatility, perhaps some less upside, but it's a safe bet. All right. Well, next on the clock is comedian and actor Drusky, but we want to get Tim's thoughts on Gillian and Giancarlo's pick. I mean, Jillian getting, you know, getting a little salty in there on the competition, too. She's kind of already, you know, making some, no, I think Microsoft, it's really hard to.

not feel great about picking Microsoft, Gillian. I'll tell you. At the end of the day, it's a company. We talked about this. They report tonight, whether there's some weakness or not. The real question is, what are you paying for Microsoft? At 35 times, this is a company that I think is a tech multiple that is at least in the higher end of its historical five to 10 year average. Azure, I think the street's expecting somewhere on it 28, 29%. Any type of a beat on that will be relief. The bar is very high here on this name. All righty. There's the sound. again today, of course, is take your kids to work day. We've got a lot of young people, ladies, gentlemen here, and they are buzzing about our next guest. The social media star,

Drusky, also a comedian, actor. Check out Drusky in Praise This on Peacock. Drusky. The four lifers, it's your turn. You're on the clock. What's your pick? Man, you know, I'm on the border right now. I'm on the coaching board. So it's pretty easy to tell, brother. It ain't hard to see. How much Nike drip do you own? Man, I got to say my closet's full right now, man. You know, we picked out. But, you know, I chose Nike because I'm in a couple commercials.

Sabrina Yonetscu got me as a coach. They gave us all our outfits for my new TV show could have been out. So, you know, I'm going where is that? And it's red for a reason because it is not looking good. So thank you, Drusky. Now, Tim, let's turn to you. We got one more pick in the first round. It's going to come from Joey.

chestnut. And if he chooses Hormel, like a hot dog maker, or Oscar Meier or something, we'll get back to that. I'm probably messing up a bunch of endorsements that he has. But at any rate, Nike, this is a stock that has come down a lot since the

fourth quarter of last year. Yeah, I mean, Drewski is just doing it here. There's no question that this is a name that I think is interesting. Nike well off of its highs. The critics will point out, especially critics playing the stock draft game is this has been kind of dead money in a trading range for the last couple of years. When you listen to the company, you're making Jusky very much. What do you got?

Let's get him back in. Let's hear from what's on your mind. I don't have a stock coach, man. I came in here by my loan. Okay, well, look, and my guess is you've got enough pairs of sleds in your closet to help same store sales coming for the next year or two. So look, I like the call, world class, best in class company trading near the bottom of a range and a company that I think also is known for innovation. It's time, Drusky. All right. Our next guest is the greatest eater of all time. You see him every July 4th, devouring 70 or maybe more hot dogs. Joey Chestnut.

Joey Jaws is his team name with the last pick in the first round. What is your pick, Joey? Ooh, yeah, looking at this board, I'm picking Oracle. Why is that? Well, you know, they just announced they're going to be moving to Nashville. I'm a big believer in Larry Ellison. And it's just their software. Everything is still, yeah, what they produce is really important for everybody.

The software. I think they're getting more in health care. And so it's really important. All right. Joey picks Oracle. Tim, what do you think of Oracle? Look, Larry Ellson has been gobbling up companies for a long time. And if you think about them, yeah, well, this is what we all do here.

And I just say that it's a company that in terms of their software revenue in the higher margin part of their business, the annuity part of their business. This is why the street has been willing to pay a higher multiple in the stock. It's traded in a range. It's near, you know, it's probably 10 to 15, 18 percent off the top of that. Interesting pick and absolutely a name that has the Delta to be in the... Are they an AI pick in a way, or are they an also ran in AI? I don't think we know. I think it's, again, hard to count out when you look where they've made their investments. I am sure on the software side and in terms of the platforms that are going to be in the periphery to support, there's no question they're probably going to be there.

All right. Interesting. We're going to take a quick break here, folks. And Jim Kramer is going to break down the picks we've heard so far. He is, well, I called you the Mel Kuiper of the draft. We're going to, Jim is going to be the main guy. Of course. We'll talk to Jim about the big decline in tech stocks today. The NASDAQ lower by about a half, a little more than a percent.

We'll talk about the picks, today's market, and more. with Jim Kramer. We'll be right back. Welcome back to the CNBC Stock Draft. Each of our 10 teams, nine teams, has made one selection. They're making preparations for their second round picks. But first, the star of our halftime show, Jim Kramer. So, Jim, quite a comeback in the market so far today. Yeah, look, I think that a lot of people realize that, you know, something,

if you parse all the words that Zuckerberg said on the medical, all he's saying is, look, this is going to be like reels when we did it. This is going to be like when we went into mobile. This is going to be like stories. have to give us a little leeway. Those who have given us the leeway have made a lot of money. And then he talked about having to spend a lot of money. And where's it going to go? Well, some of the picks are involved with that. It's going to end up going to Nvidia. It may be some of the super micro. So I think that your nine champions have really kind of taken, you know, taking the bull by the horns are not afraid of what's happening today.

And, of course, the meta pick may be the most gutsy of all because you're getting a good, you're getting a good entry point. Hey, Jim, I guess the question is based upon both today's market recovery and what we've seen in the draft so far. Is the leadership intact? Look, I think I have to question leadership, frankly. I think it's a little early to be able to say it. We get a little bounce back. But, Tim, I think that these stocks, the ones that the megas, are all subject to having the wrong holders. Your shareholders are not your friends.

They're out to dump you as soon as they see something negative. And I think we have to give those a rest. I do think that there's niche stocks that can do well. But you know what? It's not a great market. And I know that we're all excited that it's come back a little bit. But, Tim, that's not what it can. Look, we want to make money.

We don't want to bounce back from the bottom to the second division. It's got to be better than that. And right now we don't have that. If we knew, Jim, that rates 10-year yield would be 4-7, 4-75% from now for the next year, would that change your outlook for stocks? Well, look, I'd like to see two rate cuts. I think that when you get the GDP number soft as we did today, the Fed should be acting. But then again, you get a 3.7 percent inflation.

So they're hung. First of me, welcome back, Melissa, I'm sorry. I do think that where we are is that you have to find stocks that have the following characteristics. They've got to be able to raise numbers, boost forecast. The margins have to be better. And you need an upside surprise. And so you'll see a stock like a Union Pacific, which everyone had written off. That thing is sorry.

a Chipotle, which is one of my absolute favorites, where they actually, they had to tell their workers, stop eating the chicken because the Alpast store is so successful, you're making it so our fans don't have enough. Anybody's got a product they can raise price on, and they still can't get enough of it. That's my kind of stock. Quick question, Jim, is today's sell-off more about meta

or more about the GDP and the inflation number? I tell you the truth, because we have all these other stocks that are about to report in mega. I think it's the bonds. It's just so hard. I mean, I know 4.6, 4.7 to a lot of people at home doesn't mean that much. But it just means that the competition, you got that two-year over five. I mean, that's a great piece of paper.

I bought some the other day. I'm down on it, of course, immediately. But since I only have to wait two years, I don't regard it as a big loss. All right, Jim, thanks very much. Tim, thank you as well. We're about to jump right back into our draft with the second round. But first, we have made contact with Kenny the Jet Smith. he's going to make his first round pick,

then we'll go back to Brianna Stewart and Karen Feinerman to make their second round pick. Stay with us. We're going to take a quick break. We'll be right back. All right, welcome back, everybody. Before we go to round two, we have established contact with Kenny the Jet Smith,

two-time NBA champion, now known best for his work on inside the NBA. This is the first round 10th pick. Kenny, welcome. I'm glad we found you. I thought probably you were still smarting from when Charles Barkley, out touched you at the video wall on Tuesday night.

Did you win or did he beat you? It's called cheating, but it's still a win. It's still a win. All right, let's get your pick here, Kenny, on a first round pick. A lot of choices have gone off the board, but I'm sure you've got a good one. No, 10 is the perfect number because now you get everything out the way. I'm going with the Warner Brother Discovery. For this reason, once they get the NBA contract again, their stock is going to rise.

And they also, think about it, they're going to get, they have the best show in television inside the NBA. They, their stock will go up. You cannot negate the fact that once they get the NBA license once again, they will skyrocket. You're confident that they're going to get at least, David Zaslo is going to be very happy. Your boss is going to be very happy with that. That's your home team, WBD. They own TNT Turner, right? I only invest in things I know about, and I know that.

All right. We'll be back to you for round two in just a minute. How about WBD, too? Look, I love it for Kenny. I love the Peter Lynch approach. I love the fact that Brooklyn's own is going for a swing for the Fets. You love that chart. Down 35%.

That's part of the story. And I guess the argument is that this is a company that doesn't need a whole lot of good to happen to see at least some kind of a move higher. What we're seeing in the entire space, certainly in that space, we see this with Paramount. There's a sum of the parts, kind of assessment of assets going on. Private equity is picking over it. I think there's, there are catalysts there. I am also along the stock, Kenny, so full disclosure. All right. Time to get to our second round here with the money machines, Brianna Stewart and Karen Pryerman. They called an audible in today's sell-off, snapped up meta in the first round.

So, Brianna, what is your second pick? Our second pick is going to be Draft Kings. Sports betting is at an all-time high, so they say. And who wouldn't want to bet on the Liberty? Of course. Yeah, who wouldn't. Karen, you know, we sit on the desk of fast money. Draft Kings often comes up.

What made you say, okay, let's go for it? Well, it was another game time sort of adjustment. WBD was going to be our pick, but that's okay. So Draft Kings was next on the list. I love that they've reached profitability. That's a really important inflection point. Their lifetime value is going up. Their cost of acquisitions is going down.

Customer acquisition costs are going down. You get those two things together, and I think they can grow market share, and you can see a very virtuous cycle in profitability. So draft kings. All right. Thank you, Money Machines. Next on the clock is Eddie George,

and while he makes his way to the podium, Tim Seymour, what do you think of draft kings? I love this pick. It's also pulled back from the top, even after a 350% move. There's been a three and a half bagger over the last couple of years off of the lows. But as the ladies are addressing,

the market, the addressable market for Draft Kings, the rationalization within the industry, the profitability that Draft Kings has talked about. And I think these NCAA prop trading headlines are an opportunity. So you're buying that weakness. Great call.

All righty. We're next, ready for our next second pick of our second round. And that will be steady at. Eddie, George. He chose one of the stocks in the green today, one of the relatively few. Invida. That was his first round pick. Let's see what he goes with in round two. Eddie. Absolutely. I picked Invita. And if I had to say, it's the Patrick Mahomes of this draft. And not often you can get that. I think Charlotte won the elbow me in the back at the stealing her pick for last year. But, you know,

I know you will. But I'm really happy about where my position is. And my next with the second pick is all about fundamentals and sustainable excellence. And not often do you have a chance to get a guy or a stock like Apple, which I consider the Tom Brady of the draft. Tim Cook, outstanding management team. They're on the cutting edge of technology. It's always about the next thing with Apple. You know, so their recurring revenue models, great Apple pay the subscriptions.

They're known for hardware. And, you know, I have on an Apple watch. I'm buying my wife an Apple computer for her birthday by April 29th. So, hey, it's all about brand loyalty. And Apple is my pick. that compliments my pick very well. I hope she's not watching because you just gave it away. She knows.

She doesn't watch this show. She's good. Well, we got to change that. I know, really. Thanks. All defending champ, Charlotte Flares on the clock. But, Tim, what are your thoughts about Apple? He articulated that fundamentals and sustainability.

Mel, you were saying to me before the draft today that drafting Apple is kind of like grabbing an offensive lineman from a big SEC school, like Alabama. Which you can't really go wrong building around a franchise that, look, and Apple's not on top of its game. If you look at the charts, this is a company that's underperformed the NASDAQ, underperform the S&P by 20% from December. We are expecting something from WWDC to count Apple out of the AI game is, I think, crazy. But you put Apple in there with WBD, with Nike, and others that maybe have not performed as well over the last year. And there's the argument that says you've got to take a big swing on something, Maybe that hasn't done as well.

Well, there's, I would have played the game a little bit differently, but I can't argue with a pick of Apple, which is really they're tried and true. There's a lot of problems in China. There's some issues they're dealing with. All right, defending champ Charlotte Flair. She's at the podium. She also chose a chipmaker in her first round buying the dip in Super Micro. Charlotte, what's next?

So I also had Apple and draft kings, but I'm going to stick in tech and go with IBM. They also have a focus with AI. That pullback is a big one today, Charlotte. Did you make the choice based on that, too? Just sticking in tech, really, to be honest. What do you think, Tim? I think tech is like drafting a quarterback, and this year's NFL draft. I mean, you kind of have to be there.

Again, I'm not going to count Charlotte out. IBM's numbers last night were showing some, at least some slower on the consulting side of their business. Their software business is kind of udging along. It's a company that after doing nothing for three to four years really had broken. broken out to the top of a range. So I don't love the chart. I think, you know, Mega Cap Tech and IBM kind of fits in that group these days is, is dealing with some headwinds here. Yeah. By the way, the WWE has a draft of its own starting on Smackdown tomorrow and continuing Monday night at 8 Eastern on USA Network. So you got to catch that. All right. Time now for the second

round pick from O'S Perlman. His first pick was Bitcoin, the only non-stock that has gone off the board so far, I think. And he said it was a surefire bet that it will hit six figures when he's not quite as sure, but he's betting on it. What do you say for round two, O's? Always need an ace up my sleeve, Tyler. And this one went under the radar, Carvana gang. I see a huge upside.

Peaked at 350 bucks about three years ago. There were some missteps. I think management's got some strong backing right now from Apollo. They don't like to lose money. We're at 75. You see it across right now. Consumer affordability is key. People are looking at used cars, and that is their focus.

You saw Sonic Auto go up by 12% today alone. They had a comprehensive debt exchange. This thing's going to 175. This is a lock. O's has done his homework here. Austin Echler of the commanders is up next, but Tim, we know you love O's, and do you love his pick? Well, I love the 12-and-a-half bagger. It's been off of its lows of last year.

Having said that, this was a $350 stock. You can see it's a $75 stock. that doesn't necessarily mean anything, other than the fact that this stock certainly has proven it can overshoot to the upside. I think the partner inventory dynamics for this company are actually positives on the fundamental side. I agree with the macro and the auto space. We're also getting better numbers in terms of expectations. We heard that from Ford in terms of U.S. SARS demand. So high delta stock, O's is playing the game the right way.

But if the economy slows down? They've got a balance sheet. They've got a dynamic to deal with. That's what took that stock down to imperiled levels. All right, Washington commanders running back. Austin Eccler, experience is up. Remember, he chose Caterpillar in the first round. Tim was a fan of that one.

Austin, what is your second pick? Yeah, so I'm going to be dipping my toe into the AI and the chip semiconductor space going with a stock. It's been getting beat up a little bit, going with Intel. They have an opportunity to bounce back here over this next year, and I'm looking forward to seeing that and giving myself an extra boost. Like, hey, we're trending down, but this next year is an opportunity for instance.

to get back on their feet and trend in the right direction. All right. Interesting call there. In terms of Intel, you've been in it. For sure. I mean, this stock, relative to its peers, has behaved like a division to school. I mean, ultimately, it's really been a major underperformer. It's 35% off of that 52-week high. We know it's being picked for on-shoring and national champion type chip exposure by our government here. They've got a lot to do.

But, again, this is a stock that a little improvement. It's underowned. it's an interesting pick for the stock draft. They also report today. Yep. All right, half of round two is in the books, but there are still five more picks to be made. Stocks well off their lows to the day

as we keep one eye on the Dow S&P and NASDAQ. We'll be back after this short break with more choices from round two. Welcome back to the CNBC stock draft before we get back into the picks. Let's check on the markets here. We've seen quite a turnaround here, but the Dow is now down 1.5%.

This, of course, following a weak GDP report, showing a sharp drop in the pace of economic growth, but sticky inflation, raising the question of whether or not stagflation could be on the horizon. The NASDAQ is still lower, but off the session lows down by less than a percent. A meta, of course, dragging on technology despite strong earnings, the spending and continued losses on the metaverse hurting that stock. We do see a huge rebound in semiconductor stocks. The Philadelphia Semiconductor Index is up by 1.8% right now. All right, time to head over to the big wall where Neve Schulman is standing by to make a second pick.

He chose Boot Barn. That was a surprise to many of us here in the first round, saying feet and hard work are here to stay. I feel like somebody should embroider that on a sample or someplace. Knee. Oh, now you're shoeless. Whoa. Look at that. I wanted to make sure I balanced out my picks, you know, because Boot Barn is obviously for hard work.

And sometimes, you know, you want to also be casual and comfortable. So that's why I'm going with Crocs for my second pick, because I want to really have a sort of, you know, balanced portfolio. This is a thematic choice here going with feet. You're all in with the feet here, Nees. Yeah, well, as a long-distance runner, my feet are very important to me. And I, you know, I want to make sure that I'm supporting the footwear industry and the companies that, you know, keep us comfortable. Let's hope those feet are clean. I mean, I'm glad I'm not. I would only pursue they look clean. No, they, I don't know. I can't judge from here. But interesting, crocs. Yes, yes.

All right, good. All right. What do you think of crooks? Well, I mean, personally, I would probably rather be barefoot than wearing crooks. But, you know, but no one's... You also said you were embarrassed when you once got cowboy boots. Yeah, no, I didn't complain about that. When I was 12, by the way. Crocs has had a pretty impressive move. I think it's a combination of they've actually gotten inventory dynamics together.

They've seen some top-line growth. They've seen actually some broader demo demand. I am worried about consumer discretionary. I think we've seen a very resilient consumer and certainly in the upper, you know, upper echelon consumer in terms of the more aspirational. I think this is a stock that's had a big run, and I think it's a crowded space. All right, interesting. So Neve is cornering the footwear market there. Gillian Michaels and Giancarlo Cherish are on the clock.

They are the cash crew ahead of tonight's earnings. Microsoft was their first round pick. Gillian, let's find out what your second rounder is. first I want to flag that I think Drewski is engaged in insider trading and I don't understand I know what's called him out on this he's in business with Nike I'm just saying

just saying and gee you always told me do not buy stock in companies we do business with just so you know and we're going to go we're going to go with J.P. Morgan J.P. Morgan you do no business with J.P. Morgan. No bank accounts. No mortgage With your clean, no credit cards. Come on. I mean, this seems...

No, no. I'm an American Express girl, and I do happen to have an advantage vials card, which I think is Citibank, but I don't really know. I think I'm clear. John Carlo, obviously, Gillian's been doing deep research here on JP Morgan. Yeah, listen, we like the banking sector, obviously with Jamie Diamond at the hell. and the stock trading at its close to all-time high. You know, J.P. Morgan's got about $2.6 trillion in assets. If the market stabilizes an interest rate drop, I think, between their deal flow and their lending business,

we could be poised for some good returns. We picked up the stock during the dip in 2020, and I personally feel that Jamie Diamond is the right man to be leading that company. So before we go to Tim to get his response here on J.P. Morgan, And Julian, I've got to, there was some inside talk here that the fitness instructor might, might go with a Novo Nordisk or an Eli Lilly. They have the big weight loss drugs. We thought maybe you'd go there. Oh. Pooley.

What did you say? I did say. No. Could you be clearer? Jill, tell him. I suggested it. You shot me down. Jill Carlin did suggest it.

And I said I would end our partnership. 18 years if we did it. But why? And I'm absolutely not. Because you don't, I don't invest in things like Philip Morris. I don't invest in things like Novo Nordisk. It's just against my personal ethics. I just will not do it.

I won't. Won't do it. But Jillian, the the, the, the GLP one kind of drug, call this revolution in terms of helping people with obesity issues is certainly proven to have not only a change in terms of their daily lives, but there's an economic impact in the country from this. I realize you're you're gutting it out every day on the bikes and whatnot. But is it a function of that?

You think people should just be in the gym working harder? Gosh, I mean, I'm not, you know, I don't know how much time we had to really get into it. But the long and the short of it is I do not see this drug as a solution in any way, shape, or form. And I think Bill Maher put it best. It's like a mail order bride, you know, all your friends are going to be really jealous for a year until she kills you. And I don't think that there's any permanent solution there for people. And again, I could get into it, but we'd need a bit more time. Oh, and here's one for you.

In 2005, the CEO, Lars Sorensen of Novo Nordisk said there's no business for Novo in this area. Obesity is social and cultural. And they fired him. So I know that to no, no, no. Novo Nordus. on line two for Jillian Michaels. Anyhow, thanks very much. So what do you think of the pick, which is J.P. Morgan?

Well, I like J.P. Morgan. I think banks have had a huge run, though. And I look at J.P. Morgan relative to itself on a price to tangible book, you know, somewhere north of one and a half times at this point. We just got numbers from the banks. We just got numbers from J.P. Morgan. They said the net interest income dynamic of their earnings profile was down a little more than people thought. I think it's an environment for banks as long as people have jobs and creditors. holds up. Banks are going to do money center banks there as diversified as anyone.

All right. Social media star, Drusky, is back for a second pick. He chose Nike in the first round. Tim called it best in class. Drewski, what's up next? Hey, man, you know, I see what Gillian did there. She tried to accuse me inside a trading. I know my stuff, man. I see what he tried to accuse me up right there. I ain't going on biggest loser. I ain't going. But look, my pick will be Google. Google. Why Google? Do you have deals with Google or you? What kind of ties do you have to Google? Come on now. Come on now. Come on now. Come on now. You see this Google pixel in my hand? I was on the Google pixel commercial. So, hey, look, I'm going with my pick and I'm staying with it. I don't care what y'all got to say. All right. Let's, Tim, what do you think of Google?

Look, first of all, I think Drusky needs to be defended in terms of his first pick, as does Kenny Smith on WB. I mean, Ryan Reynolds won it with Netflix a couple years ago. That's true. This is what these people do. They have relationships. They've made disclosures. I like the Google call. I like Google because I think it's certainly proven, even with all the headwinds around what they're not doing in AI and their missteps so far, it's near all-time highs.

That'd be a reason for this game not to own it. They are reporting tonight, but I think the valuation of Mega Cap Tech, I think they're as defensive as any of those big players. Drusky's calling Jillian Michaels there, I think, is what's going on. Joey Jaws, Hot Dog Eating Champion, Joey Chestnut, Oracle, first round pick. What's your second round pick, Joey? Second pick, final pick. I'm going with the company I really like. I depend on at Starbucks.

I travel all the time. I use their coffee. I'm getting ready for a contest. That's all I'm drinking that day. And, you know, looking at their stock, it's gone down. They're almost like a 52-week. your 52 month or week low and uh dude i i feel like i feel like they're gonna they're gonna come up interesting a lot of people going with what they know exactly and i think that's smart right we've

seen it time and time again joe i'm curious you know when you get ready for a competent you want to be caffeinated like that's your your competitive state you're like wide away caffeinated ready to pop those dogs in your mouth yeah so i go in empty loose but i'll also try to get a little bit amped up A little coffee with some espresso in it. And, yeah, so at Starbucks coffee, it's the same everywhere I go, and it does a good job. Do you think we could combine Starbucks with Nathan's and maybe have you washing it down with a couple of Ventees? That would not be a bad idea. Maybe they should, yeah, they need to have Starbucks in more baseball stadiums.

That'd be fine. All right, Joey, thanks. What do you think of Starbucks? Well, I've been an owner. I've been an owner. I'm also probably equally as addicted to the caffeine product. Stock's near its lows. It's also evaluation that I think is troubling.

It's got some China issues. It's got some growth issues. But over long term, it might be a great one. All right. Kenny Smith, it's your turn again. Bullish on the NBA contract potentially. He chose Warner Brothers discovery in the first round. Sticking with his home team, Kenny, your choice for the second round.

I was close because I almost, you guys almost convinced. me to go with this, Eli Lilly, because we got a hot dog eating guy, we have Julian, they were fighting, and then I sit next to a guy who actually uses the drug to lose weight. So I'm like, should I go with them? But I'm going

with Delta. I'm going with Delta because I feel this is the first summer that we are really post-COVID where people might have disposable income. They want to travel, and they want to travel in style and on time.

I'm in Atlanta. I use Delta a lot. Always on time. They always have their VIP service, all of the great things. I think that people are going to say, with my disposable income, I want the best airline possibilities. Delta is one of them. I'm going with Delta. All right, Kenny, thanks very much. We're going to take a quick break there. All the picks are in, but we've got more stock draft coming up. Jim Kramer is on the clock now. We'll hear from him next. And some final thoughts from Tim as well. all 20 picks are in. We'll size them up after this. All the picks are in. Now let's put Jim and Tim on the clock. So Jim, we'll start with you. Which team do you expect to be lifting the stock draft trophy next February?

I think that O's the medalist has gained this thing right. You've got to be off the beaten track. You can't just go as much as I like Nvidia and it's super micro, and meta, obviously, Microsoft soon to report. I think that you want to go with Bitcoin because it's way off the beaten track. Now, I know our friend Pippa Stevens picked Carvana when I think it was like single digit. But I was out there last week. It's got a major short position still. So you got a big short position in Carvana. And you've got something that's an outlier.

So, Melissa, Tim, I want outliers. O's has given us outliers. I mean, I remember, whatever, six or seven years ago, I was a younger athlete back then. I picked Valiant, and that was a stock that was bombed out. And all it took was, it was the best pick that year. So tell me what the Fed's going to do over the next couple of years. And I think we can make a call in this. I agree with you on O's.

I love the optionality in both those picks. Bitcoin's either on or it's off. And I think there's a lot to do there. I do like what Karen and Brianna have done. I think in Draft Kings also, I think there's some weakness that's come back. I think that entire space is alive. These companies are actually making money, and Free Castle is very important. But what we've proven on the stock draft from the beginning of time since we've been doing this is whatever happened last year is no indication of what's going to happen next year.

So it's going to be fascinating. And one of the things, Jim, you've taught me over the years watching this is you've got to hit home runs. You've got to hit some five baggers here to have a shot. Yeah, I mean, look, you need something. Let's say the bitcoins are right. I mean, you need something that can just explode. And as much as I like a Nike, which I think can make a comeback or a Starbucks can make you comeback, you need something that could be a double or a triple.

And, yes, you could do Warner Brothers. You know, Kenny, I appreciate that. But, you know, it's also got to be good. Yeah. Whoops. All right. Well, that does it for the CNBC stock draft. You can follow all year long at CNBC.com slash stock draft and stick with Power Lunch 2.

We'll update the standings and check with our contestants throughout the year. Thanks to all the contestants. Thanks to Jim Kramer. Thanks to Tim Seymour. See you tonight at 5 for Fast Money. Closing bell starts right now.