Power Lunch - AI Risk Appetite, SpaceX Initiations on Wall Street, and Domestic Energy Challenges 7/7/26

Episode Date: July 7, 2026

The Dow Jones pulled back from record levels as investors once again rotate out of AI stocks into safer sectors of the market. Brian Sullivan is joined on set by Fortress Investment’s Elizabeth Burton to break down her strategy to navigate the recent volatility while Bernstein’s Doug Harned lays out the case for SpaceX after his firm initiated the stock with an outperform rating. Brian also gets an exclusive one-on-one interview with Exelon CEO, Calvin Butler, to address some of the power concerns in the U.S. and the lack of power generation currently supplying the national grid.   Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The Dow, pulling back from a record highest concerns about AI weigh on risk appetites. Speaking of appetites, welcome to Power at Lunch, everybody. I am Brian Kelly. Be back on the show on Thursday. Samsung spooking the market and dragging down chip stocks, some big names, down double digits. So what do you do now? Elizabeth Burton is here to lay up a strategy for you. Plus, SpaceX, it is likely lost money for many of you investors,

but a galaxy of analysts now say you have got to buy. the stock. We'll speak with one who says SpaceX can rally nearly 50% over the next year. And why is so much of America's electricity still running on coal? We'll talk more about that. The Grid, A.I. and Moore with the CEO of Power Giant Ex-Lon. Hi, everybody. Hope you're having a great Tuesday. Thanks for joining us. There you could see the markets. They are down across the board, not big declines, the NASDAQ off about six-tenths of 1%. And let's start right there. Because really, there are maybe two big questions that matter the most right now. One, is the AI and semiconductor trade finally fully played out?

And two, is inflation here to stay and going to lead to more interest rate hikes? Your first guest may have a view on both. Elizabeth Burton is Chief Strategist at Fortress Investment Group. It's $55 billion in assets under management, and she joins us on set to kick things off. Elizabeth, great to have you on. Thanks for having me. How are you? I'm good.

How are you? I'm doing great. Thank you. Two questions to kick off this show. Number one, the great rotation. We're going to get the financials in a minute. Everybody's a little bit jumpy about AI and chips now. Are you?

No, I'm not jumpy about AI and ships. I think in the short term, things look all right. I think over the longer term, there is cause for concern. And I think people are looking for reasons to be concerned in the headlines. Every single little pullback, I think, becomes more and more meaningful. But the big risk to this broader equity story is, in fact, this AI issue. So I think there's a right to be concerned here. Well, you know, let's call it AI is a gigantic cruise ship, and everybody's been getting on it.

Yep. There are some people looking for rowboats right now. I think it's fair to say, right? Sure. Are you looking for a robot? I'm not trying to get out of the AI trade. I think what I'm more focused on is what everything else is doing if this AI trade falls apart. And you know this about me.

concerns has always been that we really truly haven't solved the inflation issue yet. And I think that once, if anything happens in the AI story, we'll move on to other stories, and I think that might be one of them. And I think inflation is going higher. And a lot of these names are long duration equities. And some of the pullback that you see here and there is probably warranted on the base of that. So let's talk about that, because I think it would be fair to say that your inflation view is a little out of consensus. Yes. Explain what you believe and how it impacts how you think about the markets and where to invest? One of the interesting things to me is how many people want to fight me on this inflation story.

And I get that. That's my job is to debate the macro markets. But everyone is so convinced and so excited for inflation to go lower. And look, I hope I'm wrong. It would be better for all of this inflation and look lower. But one thing that I've been watching is the money supply. And M2 has been increasing. We know the Fed doesn't take M2 into account.

By some accounts, it's almost 8 percent annualized, and some it's as high as 11. But one thing I'm also watching is the velocity of money, you know, how much that's turning over. And that's increasing at a 25% rate over the last five years. Why? What does that tell you? Well, one thing I do want to point out is that people will say it's much lower than it used to be, right? Like pre-COVID up in the twos. And it's only about 1.4, but that's up from 1.1. So it could go higher.

What hurts my story or what I think might happen is if that velocity doesn't pick up. But one thing that is happening is a lot of this, you know, newly created money looks like it's pushing. into risk assets, which is part of the reason this money supply velocity story, you know, hasn't worked towards inflation in the past, but I think it could be different this time, particularly if it's coming from debt monetization, which is essentially just more money feeding, you know, chasing more goods. So it looks like the dot plots or as I call it the Fed light bright because they're just kind of doing this and this may go away.

I hope it does. I've never liked it. You could talk about whether you like it or not. I'm assuming you don't, given what you've just said. if you had to do the thing, the plot, the dot, would it be in an interest rate hike? I like your light, bright analogy. I've also thought of that maybe the Fed acting more like a robot, and we called it the dot plotter instead of an actual committee. Because, you know, one thing is that inflation is really hard to predict. If it was easy, all we would need is a robot to do it for us, right?

So it's very tricky. But what I'm noticing is that everyone's picking their own preferred measure. Well, okay, so if you look at flexible, then you're at 5% annualized on inflation. And if you're looking at sticky, then you're at 3. And if you're looking at PC, you're at 4. So pick your favorite measure and then tell your own narrative. So that's why I'm saying instead of cherry picking, let's look at a couple things that historically might have led to these higher rate environments. And M2 is not the only thing telling that story, by the way.

There's other forces happening. You've still got sticky services inflation happening. And then not to mention just on the yield side, so away from inflation, you've got things pushing up 10-year-neal. You know what else has been up is the financials. And what's interesting is that, you know, everybody's talking about this rotation or the risk of a rotation. Healthcare has done well.

Financials have done well. Financials, in fact, have been kind of quietly rising for like the last two months. It's kind of an interest rate story, right? Banks and financials tend to move on net interest margin and rates. Do you have a view on banks and financials generally? I'd probably got a bull there, a bull view and a bear view on financials. On the both side, obviously some of this feeds into, you know, my thoughts on rates going higher, and that should be good for certain parts of financials, right?

Net interest margin can increase as long as the rate jump isn't, you know, a step function, as long as it's a grind upwards. On the other hand, a lot of these money center banks have been making quite a lot of money off of some of these AI themes, right? You're getting fees on the IPOs and you're issuing debt. So a little bit of this can cut both ways. But I do think in general, in a higher interest rate environment, tying your investments to things that should do well in a higher rate should work out. Those are like the bigger bank, right?

The Morgans, the Goldman Sachs of the world, your former shop, by the way. Like those stocks, they'll benefit off a SpaceX IPO. The mid-sized bank in Indiana or Oklahoma or Virginia, they're a little bit different. Do we have to separate the two? I think you do. I think actually in a lot of markets you start having to separate, right? I think... With ETFs, everyone likes to lump everything together now.

Let's make an acronym. Well, because it's easy. But you know, financials aren't the only thing that can win here. I've been saying for a couple years now that I think, you know, security themes, and that's not just defense, although I think defense is certainly important now, but security of water, cybersecurity, AI security, these security themes can hold up with the markets and actually did two years ago. They kept pace with the broader S&P with less beta.

there are other things that should benefit from this. Certain energy stocks should benefit from this. So I think that hopefully we'll start look for more of a broadening out. Well, you had me at energy stocks. Great. No, it's all right. So we're just going to spend more time if we start talking about energy. What may benefit? I think anything tied specifically within energy, I think folks may have thought, by the way, this 2026 energy theme is over or that all the inflation tied to that or the higher energy prices are a 2026 thing. And I think, you know better than anyone. If you go back to past conflicts, this short duration ends up being years before we know it. And this could get dragged out even further. So, you know, I know that there's a push for this $50,

you know, oil price. I don't think that that's super likely to happen. I think there's a higher right-tail risk there. And I think we're going to see continual back on Fourth Met. So you should see sustained energy prices. Also, there was a fair amount of demand destruction. If that comes back online, you could see higher energy prices there as well. So I don't think this energy story has really fully played out. All right, but it goes to the inflation story. We're watching M2. We're watching money supply. We're watching the velocity of money. Elizabeth Burton, glad you kicked off the show. Thank you very much for joining us. Thanks for having me. Elizabeth Burton, Fortress Investment Group. All right. Speaking of debt and interest rates, we had a big bond auction about an

hour ago. You've also got Amazon selling debt. Let's kind of tie it all together and go to Rick San Telly in Chicago. Rick, what are you most closely watching today? Well, you know, I'm watching all global yields because everything you just mentioned is having a bit of an effect. If you look at the six-hour chart of a three-year, you could hardly tell they had a spectacular auction. It ended at one Eastern. I gave it an A-minus for a grade. That's the first 58 billion of a $119 billion offering over the next several days by U.S. Treasury. 10-year yields in Japan closed at the highest level since 97. Intraday, they were toying with levels unseen since 1996. And if you look at what's going on in Europe, whether it's the EU or the UK,

you can see both their 10-year yields have turned up a bit. So global rates on the move, and it doesn't seem as though appetite is easing back at all as it was great demand in the U.S. And I hear great demand at Amazon. Yeah, let's talk about that because Amazon planning to raise at least $25 billion as part of an eight-part bond sale. They need to fund the AI buildout that we just talked about a second ago with Elizabeth Burton. You got to take on that. Does it represent anything other than Amazon selling debt to make money?

You know, I think what it represents is just another slice of activity in the corporate investment-grade sector. And ultimately, there's going to be a bit of a tipping effect, all these companies go to the market. This particular offering has a little bit for everybody, Sully. It has three-year fixed and floating. And then on the fixed side, it has five-year fix, seven-year fix, 10-year, 20-year, 30-year, and 40-year. And you said $25 billion, I'm hearing it could upsize a little bit more.

Consider last month they did a $10 billion offering in Canada, Amazon, and it was the largest in history. And that was oversubscribed to as well. All right, Rickson. watch for maybe the upsizing of that debt sale. We'll see. Rick, thank you very much. All right. In the meantime, folks, speaking of AI, we've got a market flash on meta. Shares of meta, the parent of Facebook, moving higher after releasing what it calls Muse Image. That is a new AI model for creating images. It has meta's latest move to attract creators

and advertisers to its platforms. Mews Image will be available via the meta AI app, WhatsApp, and Instagram meta stock, by the way, up 2.9%. 1789. All right, we are just getting going and coming up after the break. For many investors, SpaceX, it has been a losing money trade, but is all that about to change? We've got a big call on SpaceX. You've got to hear, and you will. Next. SpaceX has had a rough run for most investors. The stock is down another 5% right now. It has dropped 25% from its highs of June 16th. But that drop may be an opportunity for you. In a new note, Bernstein analyst Doug Harnett says starts coverage with an outperform

and $239 price target, which implies, by the way, more than 50% worth of upside from here. Doug, joining us now from Bernstein, which is now part of Societ General. Doug, good to have you on the program. Listen, obviously, this is a huge stock. Everybody's watching SpaceX. A lot of our viewers have bought it or owned it or traded it, whatever. there's a lot in your note. One of the things you write is that part of the case for SpaceX depends on the success of their space launches. How big of a risk are these launches now that they've,

by the way, successfully done a number of them? Yeah. And thank you. I think that's exactly right. The key to all of this at SpaceX, the success here, all depends on the success of the space. launch business. And what does that depend on? That depends on Starship. And we've seen the first launch of Starship V3, which was mostly successful. One engine didn't fire on the second stage, but if you can make Starship work, then you now have the ability to put a capacity of mass into space that no one else can do. But the key to this is reuse, and the ability to reuse the first stage and the second stage.

And so far, they've demonstrated reuse to the first stage of Starship, and frankly, they've done that with their previous rocket Falcon 9, their existing one on the first stage many times now. So the key coming up is to see that second stage reuse. and they've done flight number 12, launch 12. 13 is going to be a repeat of that.

14, we don't know, the hope is that will go to orbit. But 15 is what we think we're targeting for demonstration of reuse. And that can enable them to put a huge amount of capacity in space and basically unleash where the value would come from, which would be in orbital data centers. How much your $239 price target is related to the idea of data centers in space? A lot of debate about that. I understand the benefits.

It's cold. There's a lot of energy that comes from the sun. You can harness that. But it's also space. It's cold. It's dark. It's expensive. How much of that 239 factors in maybe zero data centers in orbit?

You know, a huge amount. And when you look at this, if you break this apart, our 239 target assumes a level of success that's not anywhere close to as high as what Elon Musk has described, where he's describing trillion dollars of revenue potentially in 2030. We're not there. We're at about $540 billion in 2013. But the orbital data center part is huge in this. And in terms of the value, in our value, it's about two-thirds. But the point I would make here, let's say it doesn't work. Well, then you've got the connectivity segment, which is a very good business on its own.

It's not enough to justify the current price. You've got a space business, and then you've got a terrestrial data center business, which will move up to be about 10 gigawatts in size. If you took just that, we look at that. that would come out to say $119, a dollar target, as you've got shown up here on the screen. So that's how we think about this. But I think right now, you know, the vision of orbital data centers, if we see that succeed, you know, this is a much bigger business.

So you also write that Starlink, the space-enabled Internet service-providing company inside of SpaceX, needs a terrestrial component. if your $239 target is accurate, that's a $3.3.1 trillion valuation. They could buy anybody they wanted to, our former company, Comcast, Charter, anybody. Do you think SpaceX is a buyer of a land-based intranet service company? Well, let me back up on that just a second, because this connectivity business has three parts to it. It has a consumer broadband piece. It has an enterprise and government piece to it.

Both of those are global businesses. We think there's a huge amount of potential for growth there. And none of that is dependent on having any terrestrial component. It's the third business, which the company has actually looked at as being potentially the fastest growing here, which is what you're talking about. It's really the direct-to-device mobile business. And in that case, you have to have a terrestrial component to this. You need more spectrum.

You're going to need assets, basically, that, you know, M&Os have today. And that's just, that's true in the U.S. and it's true elsewhere. But I think to the point you're raising, you know, our assumption here is there may be some real pressure on mobile network operators to figure out way to work with SpaceX. And so if they can break through that, then this third component of that connectivity business, that could work. We're a relatively conservative on that right now. But, you know, that's the big question. I think you're right on it there. And the same question applies in other countries, because this business is inherently global. And so once you have fixed infrastructure up there, you can make additions around the world that relatively... So you think,

There's that old Virginia flag join or die with the snake that this cut, you know what I mean? And it's like you feel like that's how it is for these Internet service companies with Starlink, that they're going to have to make some kind of deal? Well, I would switch over to how it is with the mobile network operators a little more than the ISPs. I mean, the broadband business they have is very strong. I think it's going to be very compelling. But the mobile business, that's where they need the terrestrial partner. But I think, yes, there are a legitimate threat to terrestrial solutions for broadband in the U.S. and elsewhere.

Doug Hornet, Ph.D. Bernstein Research, Global Aerospace and Defense Senior Analyst. Great conversation, Doug. Really appreciate it. Appreciate you coming on, C&BC. and Power Lunch. Thank you. Great. Thank you. All right. Take care. All right. From SpaceX to small caps. Can the great rotation and the Russell rally roll on will hit that? We'll also talk with the CEO of Exelon about the state of the power grid, AI, and even a little bit about coal prices.

That's coming up next. Take a right. All right. All right. All right. Here is a not-so-fund fact. Call this the anti-RBI. More than half of tech stocks are now in a bare market.

That means they've lost at least 25 or 20 percent, rather, from their 52-week highs. Some tech stocks, though, are much, much worse than that. Into it, Oracle, Super Micro, maybe some other names you know, they're down more than 50% from their high. But in that time, small cap stocks have kind of stood out as a bright spot, outperforming the S&P 500 by more than 10 percentage points this year, and having the best first half start to the year since 1991. Wow.

So where do we go from here? Joining us how to talk about that and more. Tim Urbandowitz, he is head of research at Innovator from Goldman Sachs Asset Management. Tim, good you have you back on. So when I hear best whatever, insert, you know, example here since 1991, I guess you could think about it like, wow, there's a lot of momentum or wow,

the run is over because that's a hell of a stat. Where does Tim Urbanowitz fall in? Well, Brian, it's been a great run for small caps. You look, year to date over the last year, you're seeing stellar outperformance versus large cap. And this has not been concentrated through a single sector. This has really been broad. It's been across the board. As we head into the back half of the year, we do think the pace of the outperformance is going to moderate.

If you look at where the gains have come from year to date, 40% of the gains have been driven by AI infrastructure stocks. It's one of the reasons we've been bullish on small caps, and it's helped in a major way. But if we look after the last rebalance of the Russell 2000, the AI infrastructure exposure has really been cut in half. We've gone from 15% down to 7%. So you still have the exposure. It's still a positive, but much less of a tailwind moving forward, you know, capitalizing all that money that's rolling downstream from the big hyperscaleor spending. Secondarily, you look at the valuation. The valuation is much less attractive than that.

it was to start the year. So a lot of the easy money, the bigger gains are going to be hard to come by. In our view, this has to be a cyclical growth story, and this has to be an interest rate story moving forward. Yeah, because to your point, I mean, these stocks were unloved and forgotten about, and now kind of people have remembered them and a lot of money has flown in. We just talked with our lead guest, Elizabeth Burton, about interest rates and inflation. Is this going to be an interest rate story? And if so, which way will it swing to the benefit or do? detriment of small cap. Well, typically, Brian, if you look at small cap performance, it's all about economic growth

first, which we think is going to be there. But interest rates are also a big component, given how much floating rate debt we see a lot of these companies having. I think one positive for small caps here, we think the market is mispricing the Fed right now. You see a hike priced in by the end of this year, and we just don't think that's going to happen, Brian. You look at payrolls data, been a little bit softer here recently.

we're starting to get some relief with the situation in Iran. Yes, you've had a lot of tough Fed speak here recently, but we think that has peaked. And ultimately, you're going to see a Fed on hold. You're going to continue to see those hikes be pushed out. And as those get repriced, we think that does offer some more support, not just to small caps, but also to this broadening out trade that we have seen across the U.S. equity market over the last year. Fair point. So a hold is the new cut, I guess we could say. But when I'm looking at a 10-year at 4.5, 4.52%, where it is right now, Tim, I'm thinking, okay, that's not 3.5%, right? Has the market gotten used to and will digest better this thought of higher interest rates

for longer? And I'm not saying 4.5 is high. Historically, it's like the 30-year average. But given where we were post-COVID, there are many people who think that 4.5% is is quote high. Well, Brian, four and a half percent is a key level. And it's the level where we really start paying attention because it's the level where you start to see interest rates having more of an outsized impact on equity prices. So if we continue to see interest rates move up from here, those moves higher are going to have more of a negative impact on stocks.

It's been a key level over the last few years where investors start to digest those increases, interest rates, much less than they do. when we see interest rates below that four and a half percent level. We think interest rates are close or already at a peak with the relief that we're seeing, you know, with the situation in Iran, hopefully starting to see inflation coming down a little bit here. If that's the case, that's supportive for equities. But you're absolutely right.

I think at this four and a half percent level, we do need to be cautious of any moves higher. Tim Urbanowitz, at Innovator by Goldman Sachs Asset Management, the new names that you guys got bought. But Tim, we appreciate you coming on. Same great Timmer Banoids. Take care. Have a good day. Great to see you, Brian.

All right, good to see you as well. Folks, it is summer. It has been hot. And with the heat, power demand soar. Is there a risk of running out of electricity? Excellent. CEO Calvin Butler will join us for an exclusive interview on that and more. Next. All right. Welcome back. As power demand surges across America, all eyes are turning to the companies that keep the lights on and the air conditioning running. One of those is Exelon. It is one of the nation's largest utilities, delivering electricity and natural gas, nearly 11 million customers. And between AI power use and cranking the air conditioning to counter summer temperatures,

electricity demand is sky high. Joining us now for a CNBC exclusive is Exelon President and CEO. Calvin Butler. Calvin is good to chat with you again. Thanks for joining us. Always good to see you, Brian. Thank you for having. Well, a couple days ago, I mean, it was red hot across much.

the East Coast, like 110 real feel here in New Jersey. The low demand grew. You guys met the challenge. Power stayed on. But is there a way to gauge how close things get? How close are we right now? Well, you know, as I said, the issues are real. And PJM, which, as you know, serves 13 states and roughly 65 million customers,

which is where the Mid-Atlantic is basically within and all of our jurisdictions, it reached a peak, Brian, that it hadn't seen since 2006. So when you talk about the demand and the supply that's needed to fuel this future growth that we're experiencing across the country, the issues are real and we have to address them. So it's coming and it's coming at us fast. And the grid, as you just said, was tested in real time. Yes, it was. And when I'm looking at the generation fuel mix on PJM, which is basically just

the way you can look at where the power is coming from, nuclear, solar, wind, whatever. 124 plus million megawatts or megawatts are being produced right now. 25 of those are coming from coal. So about one-fifth of the electricity in the PGM grid area, that's 60 million people, is coming from coal. I think a lot of people would find that surprising, Calvin. And in 2026, why is coal still such a big share of our electricity generation? Well, great question. And it goes to the point that we need every electron.

And the answer to why coal is in the mix is because we're meeting future and current demand. We need every molecule showing up to be part of the solution. So to back coal out of that, what you're seeing is that we're not having new generation. of other alternatives showing up in real time. So it would be, it would not be constructed for us to roll any electron off of the grid until new is built to meet this demand. And that's why coal is still part of the mix. The current administration has even delayed some closings because they recognize the affordability crisis is real. They recognize that we cannot be shutting down power plants when we need electrons.

So that is the real issue. Until we get more solar, battery storage, nuclear, gas built, it would be counterintuitive to shut down any other alternative we have. And I don't want to get too into the weeds on it because it is really sort of deep in there. But PJM wants to kind of change the way that utilities like yours sort of connect and manage to power. I know you're probably in favor of some of the proposals. You're probably against some of them or want some changes on them. PGM's kind of been more of a quiet organization until now.

People are starting to recognize their name and the role that they play. What would be the best outcome of some of these decisions for Exelon shareholders and customers? Well, I think it's a win, the fact that you know what PJM is. And the fact that we have legislators and governors who are talking PJM is a win for all of us. But the solutions are very straightforward. And let me just tell you a few of them. One, we need more generation built. And I think the utility should be part of that as a generation builder.

We should be part of that solution. Two, we need more transmission to be built across the entire system to ensure that the electricity is flowing. Three, we need faster permitting. And we need that to happen from the federal government and Congress to really jump in and say, permitting must be real so we can get things built in this country quicker and not slower. Next, we need greater investment into the overall grid. What we saw last week with the rising temperatures is that the grid is working. We had the men and women across this country maintaining this grid in times of extreme heat

and in many other places extreme wet weather. But the grid showed up and these utility workers continue to show up. And I would say also we need expanded investment in grid enhancing technologies and battery storage. Once again, all these investments are required to move us forward and to meet this time of need. Fair enough, but the challenge, I think, is those investments cost money. Everybody, listen, nobody thinks about electricity until it doesn't work, right? Until you try to turn the air conditioning on and it doesn't go on, or it's winter, and the heat doesn't work, or the lights go out. Who pays for those investments that we need to make because the population is growing, energy demand is growing, people want to live in Phoenix,

They want to live in Houston. It's hot. They want air conditioning. Who pays for that? The everyday customer. And our customers are telling us is that prices are growing. Affordability is a real issue and prices are getting out of hand. And that's really a supply and demand issue.

The more demand you have and the lack of supply, you're going to see rising prices. But to your point, Brian, we need to continue that investment because we're having extreme weather conditions. If no one cares about anything else, if the lights don't come on and the gas doesn't flow, we're going to be in a real bind. And in extreme weather conditions and extreme demand requirements, the grid must continue to be the backbone of everything we do.

So having said that, the affordability challenges are real. And I think we can do both. We can provide an affordable grid and continue to build for the future and have a reliable and resilient system. It's not an if or if or or we must do both. Do you have a point of view, Calvin, or care about if a big tech company builds a data center and builds their own power, what they call behind the meter? Or do you believe that that data center power source should be on your grid or PJM's grid or somebody else's grid and that power is then bought by the tech company? Do you have a point of view on either of those things?

I do. Very clearly, we encourage data centers to bring their own generation. We support that. And whether it's behind the meter or front of the meter really isn't the issue, but they must continue to pay for the infrastructure that is in place to support that because they require and want the reliability and the resiliency of the system. So therefore, the transmission system that has been built for everyone, they should have a part in paying to maintain. is the administration, I believe, is pushing for that, right? They are. If you want to build a giant power plant, the power giant data center, Mr. and Mrs. Technology giant, you'd better pay for the improvements because if one of your customers doesn't get power because some transformer blows or

whatever it might be, they're going to be ticked off. That is true, and we support that. And to be honest with you, I have not spoken with any large data center developer. that is against that proposal. And we are pushing forward. What they care about is speed to connect, and we're working with them to ensure that they get connected as soon as they want. And all of them have demonstrated that they're willing to pay their fair share,

if not even slightly above, to make sure that the communities in which they show up on do not feel that they're a taker, but they're also a participant in this infrastructure investment. Calvin Bueller, CEO of Exelon. Great conversation there. Calvin. Always appreciate your time. Thank you very much for joining us.

Thank you, Brian. Always good to see you. All right, take care. Thank you very much. All right, let's get over to Pippa Stevens for a CNBC News update. Hey, Brian, three tankers were struck by projectiles Tuesday in the Strait of Hormuz,

according to the British military. One tanker caught fire off the coast of Oman. Two others were also hit, including one struck by a drone. Officials say no injuries were reported on those two ships. The Saudi Foreign Ministry also said one of its tankers in the strait was hit. The attacks raised new consulate. about traffic through the key shipping route as countries try to ease the economic strain from the U.S. Iran War. Senator Bernie Sanders is pulling his support for Maine U.S. Senate nominee Graham Platner.

It comes after an allegation of sexual assault against Platner, who is now facing growing calls to step aside. Sanders is the most prominent lawmakers so far to withdraw support as Democratic leaders scramble to decide what comes next in the race. And New York Knicks star Jalen Brunson underwent surgery on his left wrist today. Sources tell ESPN the NBA finals MVP played through the injury during the Knicks championship run. He's expected to return to basketball activities later this summer. Brian, he of course shoots left-handed. So this makes those 45 points in game five all the more impressive. How awesome is he going to be with two good wrists?

Yeah. It's going to be fantastic. Bipa, thank you very much. All right, up next, we are going to look outside tech at some beaten down stocks that might be poised for a bounce back. Your market navigator has the picks with Dom. Next.

And welcome back to Power Lunch. I'm Dominic here with your Market Navigator. When it comes to growth or value, momentum or low vol, do investors have to really choose? Our next guest says no. He's watching a few names that he says, checks the boxes on multiple factors. big boys for bigger gains ahead, even against some tech high flyers.

Joining us now with that story is Eric Clark, the portfolio manager of the logo ETF and chief investment officer at AcuVest. Eric, some of these names are always benchmarked to AI standouts. Which ones in your mind are non-AI directly related that have room for upside potential? Yeah, I cannot hear him. So maybe what we're going to do here is see if we can get that. connection going. It doesn't seem like we can. Maybe, you know what? Caleb 1 to 10. How much you love live with it? One being, just absolutely fall in love with it. One being you don't like it at

all. I love live TV because of things like this. Now I'm just going to put you, we're just going to have fun. Because by the way, can I just say that you look great? Like your tie color is really, I think you have great taste in suits and ties. As is yours, Brian. As is yours. So quickly, come on over here. I think we're going to try to get the guest. back up. For one second, let's talk about something. We talked earlier because a lot of people don't know. Look at Dom Chu. There we go. Let's light them up. God, you're even more handsome as you get closer. What do you think of this small cap rotation? Do you think it's real? Because it's something we've talked about a lot. People have been waiting for it. It feels like it's here.

As a former fund manager, what does the Dom Chu take? You know, the interesting part about this whole conversation right now is that there is this broadening out element and there is a constructive element to the economy overall. If small caps are performing the way that they are, if credit conditions are still solid right now, if the market overall feels like it's not really poised for a downturn, then maybe that small cap trade does have legs. Well, something that I would have enjoyed. We would have had the conversation. We'll revisit that at some other time. Absolutely. Dom, I appreciate your flexibility and finesse. Live television. It's what it's all about. Chef's Kiss. There you go. Dom, thank you. You got it. All right, folks, a big upgrade in the energy

space earlier today, but maybe not the name you expect. We'll get you the call and the analyst behind it next. All right, the company we were referenced before the break was that one right there. First Solar not exactly a good run for investors the last couple of weeks. In fact, First Solar stock is down more than 25% since the beginning of June. But one firm sees that pullback as a buying opportunity and is bullish on First Solar's rebound, Deutsche Bank upgrading its rating on FSLR to a buy, and raising its price target to $275. Joining us now, the analyst behind that call, Corinne Blanchard. Good to talk with you again, Corinne.

Thank you very much. First off, what do you think has been behind the weakness on First Solar? Why has the stock lost a quarter of its value from its recent high? Yeah, thank you, Brian. I would actually report down the question all the way around, and I think we had a very strong me stock performance, not only for first solar, but across the entire solar slash clean tech coverage. And I think that was a few reasons.

We had a pretty, you know, good one-cue commentary across the space, European battery storage, driving some of the other names such as Enphase or Solar Age and kind of pulled the entire coverage and sector. And I think for first Solar, we saw that enthusiast, fading away a little bit in the last. seven or five to six weeks. And specifically to first solar, we have not received yet any clarification on the section 232, which is a market that is expected to see probably need to mid-June. So I think it's just, you know, markets doing what it does best, you know, it's a bit

of a break here. Yeah, we also just chatted with the CEO of Ex-Selon about some sort of regulatory things behind the scenes. It's complicated. similar with First Solar. You've got the Section 232 tariff negotiations that are going to be decided, again, very wonky, very in the weeds. But the fate of First Solar stock in some way relies on the outcome of what happens here in kind of a non-super wonky way, Corinne, what's the best outcome for First Solar and its investors from these 232 negotiations. Yes, I think we're expected positive outcome. We expect to see a tariff put in place a certain dollar percent, sorry,

cent per cent per cent per watt tariff in place here. That would just put an additional advantage for US-based production and first solar will be, you know, very first-world position to benefit from it. Corinne Blanchard of Deutsche Bank upgrading for solar to a buy. The very bullish price target, Corinne, really appreciate your time. Thank you very much. Thank you. All right, we're going to take a very short move.

By the way, got some breaking news on oil and Iran. Oil is up. We'll get you the news and the trade in just a quick minute. Take a look at it in this break. Be back with it right after you. All right, welcome back here, everybody. Got some breaking news on oil. It's moving oil and it's moving a lot of the oil stocks.

All right. First, the news. The U.S. Treasury Department is revoking the general license that authorized the sale of an Iranian oil or Iranian oil. It comes after an official toward Rooters at Iran's attacks recently in the Strait of Hormuz, the ones that happened basically last night or overnight last night, were wholly unacceptable to the United States and will be met with consequence. Remember those assaults, Pippa talked about in the news update a few minutes ago. we're likely from sort of the IRGC, the Iranian Republican Guard, maybe not the full Iranian government, whatever that meant mean. But whatever it is, it is moving the price of oil because

if we revoked that general license, we are going to see less Iranian oil theoretically, because they were selling plenty of oil beforehand, theoretically less Iranian oil on the market. Oil right now is up about $4 to $71.40. Still well below where it was a couple of weeks ago, but it is up now. That move in oil is also moving up oil-related stocks. Exxon and Chevron, they're both up 3%. Conoco Phillips getting a bigger pop. It is up 4%. So again, some general headlines around Treasury revoking the Iran license, a temporary license, by the way, to sort of legally or without sanctioned sell Iranian oil. Price of oil is up 4%. Oil stocks are up 4%. Quickly, by the way, speaking of energy.

a different kind. Tomorrow on Power Lunch, the CEO of Sun Run will join us. Folks, thanks very much for watching Power Lunch. Closing bell begins right now.